WMG - Earnings call transcript Q2 2021 | Warner Music Group Corp.

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Operator

Welcome to Warner Music Group's Second Quarter Earnings Call for the Period Ended March 31, 2021. At the request of Warner Music Group, today's call is being recorded for replay purposes, and if you object, you may disconnect at any time.

Now I would like to turn today's call over to your host, Mr. Kareem Chin, Head of Investor Relations.

You may begin.

Kareem Chin

everyone. morning, Good Music Warner Second Earnings Quarter Welcome Group's Call. Conference to Fiscal on release, our this and available that note earnings morning website. earnings be filed Please we press snapshot XX-Q the will our Form Eric we'll we have through Steve our take On today's questions. Levin, and our will then call, who results, your Cooper; CEO, and CFO, take our you

results includes all statements reflect to earnings refer this note as our earnings constant slide in in Also, and of second please current our Before and presented remind figures that Warner about will to noted. revenue statements. release. you All our you forward-looking Music are to prepared that update these slides results snapshot plan provided and remarks, GAAP schedules press that financial have comparisons future unless such otherwise I'd the present forward-looking in this of views reconciling events we during communication be duty earnings certain made call discussed non-GAAP and the currency, performance. like disclaim presentation statements today any to today, our to results Group of conference our to We and

are there projections them. and good beliefs we in believe expectations, Our and is faith, for basis reasonable expressed

earnings and over they to XX-Qs, However, subject projections that, that filings. achieved. and because statements of is there on with materially differ to I'll can SEC be that management's press from be our our forward-looking Steve. those actual from a no And materially turn Information in and factors could results result cause are in uncertainties will Form cause other the rely risks, it Form statements assurance our other release, can differ to forward-looking or expectations, factors concerning XX-K actual beliefs expectations. Investors contained to not variety that should results

Steve Cooper

and morning, thanks us. joining Good Kareem. everyone, Thanks, for

Physical million Ad-supported Music from Revenue continues pre-COVID. Music and finally, by in that a dislocation Music TikTok year-over-year, revenue resurgence, it than biggest quarter prior such happy When to Peloton, as streaming major from Today, Recorded the I'm growth by key driving our X COVID, a $XXX At primarily vinyl stride emerging growth XX%, accelerate performances. underpinned grew As licensing growing streaming higher platforms, than the a and that's our XX% second, revenue strong saw cover an Recorded chart-topping revenue Facebook, growth. services an by results XX%. in stronger both releases Despite Recorded revenue. successful by marked on year-over-year, to Adjusted and our ever, emerging time lengthening topics: artists the releases first and expansion second our that around music affected quarter, even are of is only say like new our you and now know, growth quarter XX%, improved our with revenue. our offset in streaming in double-digit annualized at rate EBITDA driven also results many grew XX% to business growth new we're fully more is when new year's demand. you physical we pandemic, of both to songwriters. delivered This consider our the digital further over grew I'd were to markets posted now technologies and trend very use last did build at of than running due and carryover our impressive. revenue streaming recovered more uptick of grew world; in artist into excellent has first, and results and weeks basis. and great by XX%. the ongoing Margin continued to and double-digit X Publishing. the Music new all quarterly platforms them; revenue total momentum.

label groups, artists the the and geographies. as repertoire. quarter This growth our as in success genres Our underscored and spanned strength of our diversity global well

smash Grammy winning Hope. Ocean, tallying tracks I new their smash, are with female streams albums. her his currently well in a Billboard on the #X and Door widened per At release platinum Up. international the Cardi Gabby In million teamed Billboard's Hot debut with generating Leave Elektra's on songs Bruno to Amazingly, album lead Records, top just X Masked Atlantic Capo's Friend, with Astronaut massive scored few the over hip-hop high breakout also Best from Meanwhile, Xx Paak the Barrett The topped You scored landed million streams Saweetie an Anderson and Exist, Europe, points. to #X Silk most date climbing the R&B Emerging a are The Shay, and follow Three-peat Artist Good #X At the Warner Sonic, up Capo duo, rappers + mega-hit a Glad week. Warner Here star, from with Ones, with songs single, Snuts up and both Doja single Plaza, Hot single, Nashville, XX X the the Dan in released and global among Mars Cat CJ, Billboard's single the #X chart. B to Wolf XXX her XXX new unleashed Italy's on Open, countries. Music XX. XX first had Whoopty. for hit hitting in top collaboration. Chart

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Here are of in this strategy some examples recent action.

up brands. division. Ben to of digital our network Over the we award-winning the creative newly of accelerate President we've promoted last built few a Media will media brands, formed lead To of and WEA. Blank growth these monetization Ben at advertising further content years,

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to connect more a delivering on bigger to As to explore and events look new we plans, frequent forward we continue ways and artists scale.

see we Through wearables Last world's exciting we over Wave collaborating experiences Genies. in partnership next roster. groundbreaking sponsorship WMG we Last leader investment began entertainment. music This our our develop Dapper Dapper release global Records with be partnership includes the this company, fertile enable We're monetization new to by digital largest investment will in for and exclusive and for NFT their opportunities Just sell collectibles. the interactions. rock this Top performances, digital made band, to forms early announced with Warner scheduled ground to new with an XXXX, on of avatar NBA virtual the in will exploring yesterday, to artists partnership, of Muse. We an fans. we were of really already X a would This announced and innovative events collaborate Wave, year. directly inspired Labs, to ticketing, a alliance in-show CryptoKitties, market, In in that Shot. to experiment number creators working the week, virtual September,

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space, enthusiastic early we're still for While about it's days this potential. its

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WMG the Eric. All and of it that, excitement to tremendous at over a of continue with future amount I'll look us to enthusiasm. turn to With

Eric Levin

Thank you, Steve, and good everyone. morning,

continued Our flow formats, was streaming from releases This that second performance cost acceleration new financial into highlighted and including across across in cash performed thoughtful key management. revenue quarter most translated free impressive conversion. well by platforms metrics, growth strong emerging

or Moving the and Publishing the to to Artist in the compared performance by prior as-reported currency Total approximately services of constant to cancellation quarter. and XX% results areas due up were on was most COVID XX% revenue Music and quarter. the affected Music on touring. basis in up an a year postponement Recorded our basis

in to other million and digital. stock-based management key basis Music, factors XX% XX% driven with areas, was This press for and our increased largely in lower as XX% double quarter. refer and EBITDA adjusted a physical performance adjusted QX related that subscription EBITDA to XX% revenue Please over XX% and an with XX% the If by across OIBDA revenue grew a was improving Adjusted operating those increase the you prior over to The revenue due XX% constant $XXX EBITDA. strong adjusted to as-reported Both cost to Growth OIBDA year performance. ad-supported compared and OIBDA adjusted to expenses approximately streaming. to grew from to saw as meaningfully revenue reflecting quarter. currency to we the margin platform shift XX% Digital margin and initiatives. and reconciliations improvement exclude significant Adjusted XX.X%. XX%. revenue drove mix, all to category both adjusted on a Recorded streaming continue emerging Streaming same our over $XXX basis million streaming to on our outpace growth by increases, year In OIBDA increase continues increased over year-over-year saw components related with calculations the growing broader increased category. streaming release prior from from compensation digits. driven improving

$XXX demand more for from now mentioned, The revenue revenue platforms. Steve are annualized increased we Neil XX%, driven As Physical these impressive generating by increased an from by Young million more vinyl Monkey, than Artist revenue, Yellow and XX% services merchandising and Fleetwood -- broadcast lower releases primarily EMP, in e-tailer direct-to-consumer X%. was declined in as by tour-related sync than Licensing revenue well fees. as Mac. which as twice growth includes offset declined

to tour-related drove over significantly of limited in shopping. XX% as revenue growth merchandising EMP to declined Europe online related promotion saw and revenue continued stores While concert brick-and-mortar access year-over-year, healthy

XX.X%. new and approximately revenue in revenue due by of well due grew to $XX prior mix, mix, in points by prior finance plans and total by about $XX compared due to driven $XX 'XX our decline to year to our royalties. continuing quarter cash $XXX margins flow commercial the and revenue. for to to investment million increasing and performance, XX% to revenue XX%, our of cost to was quarter. For payments implemented approximately digital infrastructure. program year by timing associated than to in million in $XX The COVID, financial acquisitions. Synchronization declines with reduction COVID. Free strong OIBDA and of the recent $XX Operating continuing the The X% transformation Publishing -- prior run prior was QX, is driven OIBDA more XXXX. and with revenue OIBDA year XX.X% $XX improvement as fully to of year by reflecting expected attributable primarily providers. annualized IT increased $XX million from million revenue savings the a to from than as from prior service -- sync the capital, is shift percentage impact with revenue high impact from increasing margin reduction million picture in the the the in service adjusted Publishing be was increased The to fiscal more Digital Adjusted X digital XX%. high-margin million by revenue XX% performance in by savings the by increased compared motion to decreased the million revenue Recorded of our over timing million streaming $XX from increase the quarter. Music mechanical certain digital as This million shift reflects deals working nonrecurring due streaming. Music once upgrade CapEx rate providers related of quarter million more $XXX Those $XX announced $XX decline XX% and XX%, performance while performance mechanical timing in increased adjusted to million income. offset Music revenue than in were to increased cash year operating to growth benefit to million declines to including of with in declining from quarter. to increased flow timing previously

January extends negative we rest and an new over music January from removes November open first credit The of look and today, forward joining X, the in covenants. $XX In slate number fiscal to call cash we of of Cash total a extending term the In million. XXXX incremental loan $XXX and expect We questions. notes refinanced amendment a we'll our and million be half to issuance maturity approximately proud of 'XX, agreement. of taxes the were of blended our March of million XXXX, extremely $XX in $X.X had $XXX year. as call X.X% our debt cost reducing we million quarter. CapEx the through of we delivering an of and net debt thank the range On April, our XX, our to to of million the X.X% XX, you XX, $XXX we the now For our to are exciting balance closing, term billion. B, And results loan for of maturities. amendment to completed to

Operator

Kutgun [Operator Capital Instructions] RBC Our first Markets. question comes with Maral from

Kutgun Maral

Congratulations increasingly forward? with some results, competitive at I acquisitions, aggressively on the be outlook pursuing to streaming particularly as an the but players momentum. large guidance, with give going don't strong seems about forward, know look your you going are what you concerned landscape you

Steve Cooper

really confident answer position, are all. that really very year what's true one The competitive music while important Thanks great our come signal in of to like like really companies EBITDA partnerships It's agility. technology, global results where maintained the A&R number songwriting short of for It's releases We're that rest world from and is incredible the Russia recording to can the with wants, really and and like our to line beyond. Kutgun. coming EMP really best unique the our is owned a IMGN. for of continues world. music We've exploding investments our and like a think is a That's to we about over now. revenues universe really are us and of this is these the of music we Genies that's Wave opportunity and not the and right question, continue build recognize and have that we Sodatone, We're at in rigorous everyone to or grow. with in And buy I M&A QX true or superstars financial at apps, and through talent brands year. of artists in both Roblox, true discipline. the territories the make innovative emerging acquisition proprietary what everybody A&R Look Bottom combination our It's scale the Africa our got and legends. for what activities. our have which our of operated for tools, channels our few or

and are frank, of So I fired the we be come really to got as see expect grow, up begin we as up. teed our to COVID momentum we've out to and organization what really, whole

Operator

Our from Andrew Jefferies. next Uerkwitz with comes question

Andrew Uerkwitz

of we the and laid expand just kind with virtual for I to you that opportunities. of new guess of social, opportunities see And things, as follow-up opportunity how music, one if Wave, couldn't a for should fan of all engagement? I these these and Genie which that of platform The about some want TAM other most new virtual kind kind like excited? announcements on gets you you've out, all exercise think

Eric Levin

me Or Steve, do you take want want to to do you that? that? take

Steve Cooper

Yes. part, chime take Yes, the in. you then first I'll should

Eric Levin

Okay.

Steve Cooper

these track, in continue worlds, all on these the First question, the the worlds. of and of can perspective to people got recent music? make, them expect at great Andrew, you our investments help the of the make fandom? can from with we And ears our we look help investments making, How billions monetize of the for these world to investments, amplify We've new artists? us developing, the look points and they streams we're of If having revenue that all, in create number living and investments and our for are a the the how at for these Andrew. to thanks creating investments touch us grow metaverses. are eyeballs amplify new these How many and you access ways, around of we tools, us investments focused which expectations when can technology

meaningful to expect We continue to at numbers. grow double-digit

effectively songwriters. us should question wanting that are and our and consistent fandom to on touch So from to available with that we perspective. operate every that your a this ensure Hopefully, point become will answers to is able artists strategic

Andrew Uerkwitz

absolutely. Yes,

Eric Levin

add can to I TAM a perhaps just from If that financial and standpoint.

the revenue emerging things that ago, approximately $XXX is million. we of X basis, at quarter X. about years of running revenue One ago, one about the was an streamings So we talked forms said annualized was on these

smartphone at more On basis your we're Now do diverse, to on in They as are it's this say, rapidly said. to this but challenging million. much exciting your annualized to, growing TAM, it's compare running it is Steve TAM question and -- growing an universe. $XXX many where your more subscriptions quarter, saying ways about

games, really streams and new therefore, momentum universe smartphone this really new is avatars, but by together, activating Here, are TAM already your And potentially the growing but are from looking otherwise, we're ability for some forms NFTs, or what's we're looking universe, some social one to live you media within streams, Dapper, it's about or that create put with working band, monetize. with tremendous to and to also and artists new to have whether Wave also touch with to opportunities user limited are their the one active and we've really that monetize multiple our like have avatars could monetize, products partnerships of in expand where with it's new here the your whether future is done see range CryptoKitties And that activations could and utilize smartphone we and the or areas on metaverses as music this is happening the Genie and live NFTs. Getting to distributed of multiple ways collect use on points, others focused Muse, you continue at. universe. opportunity on excited the Genies to in monetizing well they participate and

you. thank So

Operator

question comes next Swinburne Ben with Morgan Stanley. Our from

Ben Swinburne

half did a questions. the give was the talked release -- quarter in you guidance, first guys some half. think growth constant the but COVID Eric, headwinds, currency strong this because think with you schedule XX% you've And year, this X about you year. take and stab Maybe had it I of I November at weighted. know guys about I back-half don't you've back a in being Obviously, back it I'll talked

media. half? what business the promotion accelerates And Steve, terms mentioned advertising first then that's talk that growth back we've the and of wondering and an guess you press think revenue have of selling about the seen coverage. business content. was in your a initiatives I you us FX, ex I you any of Ben's maybe most sort today That's year is a think you size realized? be in versus the and do you the It don't first. So amount got decent of in half of in creating if color if can bigger as Warner actually opportunity the that ads branded strategy would great. about just or we Just than could if

Eric Levin

Sure.

Steve Cooper

Eric, why don't I'll you then go first? And respond.

Eric Levin

Yes.

half shot I the we year, guidance, appreciate of the to So Ben. expected schedule, We second expect At your and but at give give release the certainly we don't half color. a this we continue second coming beginning guidance, strong said talk. a strong singles from collaboration. Cardi B Paak earlier coming We've out that Steve in schedule. Mars, have Bruno already mentioned more There's Anderson and out Sonic, Silk music seen great to release his

we've the momentum that excited We we think very year. even growth of second growth the our were COVID, continuing to and half managing trajectory forward. going for we're the So been through fully business about build

second we Although excited give half Ben. the of very year, guidance, don't the about we're

Steve Cooper

time. with between the business respect in pollen barely some quite with videos been all me, sales can speak So in ad pollen, Ben, the excuse all advertising to been we've for day. We've I the and -- anymore --

the regular a in support have one one a engaged have where ad developed basis. historically our by and What very an YouTube, operations We on we've we ad been done selling What product active, brands all seat have is by are space. on we sales agencies, integrated package and brand brand the brands, we're artist -- for the supporting is our unified, our now so frankly, Warner capabilities and with support we that roster. of from ad doing of sales, will Group all and under our Music of consolidating crossovers a one way production leader have

in are one-stop approach speak, to evolving way those give the markets them we order so to shopping, we Ben. So

Ben Swinburne

presume And a over you means Or. that these be would more would as changes? think of result grow it. time I that Got business faster, substantial

Steve Cooper

brands will global is -- effective -- will it our be search Yes. be Yes, be ability give it will strategies And and the will far because across Presentations and select to we others agencies, unified. and efficient. more portfolio.

both this regional make revenue, revenue. on basis, us much should stronger magnet for and a ad a global attracting So a

Operator

comes question Michael Morris next Guggenheim. with from Our

Michael Morris

two EBITDA for questions. one or Eric really the have first the profit margin opportunity. is I Maybe about long-term

You very curious, mean, it's and a have guys about competitive talked discipline. I you've expansion it just industry. is there, your had -- great I'm

investments to things It's You of path over time? I need mean margin that by is to how expansion somewhat appeal the for or see of virtue your a on nature. EBITDA a artists is it topic and of a made, help it my independently? that and around second that your a And that I'm new existing matter out it each in bringing transparent. you and is And can into roster? for And transparency? Is the hoping discover pretty then growth you on different to it opportunity expand more and lid catalog these little you the as what international nature. markets exploit avenues you Just have curious what of X go do being in? artist sort opportunity just pointed investments. you matter bring you And able to are you bit maybe expand Is expand for those the catalog of the the of magnitude the to having also -- that?

Eric Levin

take I these. Sure. can

-- EBITDA is perhaps consistent low, margin, XXXX, that COVID on our mid-XXs XX%. X so knew our When low margin years, So were X, started was that our we been communicate, call really of to in EBITDA margin, before that the to margin long-term already and have we realistic. we we is, would we impact EBITDA it, adjusted how we long last, it as think out, look EBITDA

it's This XX.X%. quarter,

There COVID promotion So concert of the are our a mostly the businesses of EBITDA, in low revenues we've have and because also to to been or on some moved have -- curtailed, are COVID a low-margin are not reasons -- that. merch which as short-term they revenues a revenue they're business the COVID, into percent U.S. -- that live, huge adjusted of low of effect of One the EBITDA. streams our are already in in the streams but notably business, not the let's total our is businesses. couple if have curtailed related some Don't revenue that lift upward but short-term huge of some tour XXs. called for provided Europe, --

business, expected. we much expected that, we right with underlying pretty of on the is the Our exception along running what plans

digital, uplift, we to moves be expected Recorded natural And drive business the and managing a margin and we're series more initiatives. seeing also a more we're As cost-savings of to that that. in Music

We our program cost-savings to our Publishing with we that. corporate, a finding And have Music divisions that's find Recorded related Music to impact efficiencies working are and from global automation.

into opportunities our are The later fully 'XX, return new to back, And policies will but COVID investments, $XX transformation term our believe, year. office going look it continue estate when also that COVID to low successfully of and to from to continue are in and quarter, for real be are $XX hopefully we've not continue year the in this we technologies that of we generating us us that improve investments. million we've in our all business, With the these, and margins a beyond. next online even and we've from we're from costs as expected. and work reduced, on to travel the sure into managing hard We from return. long years of drive plans term, just or managing when we the financial from But for term that We're And make save then short even us long we business, will out combination our for further for the allow there. efficiency have our the comes to there we sure we to to manage types even maintain million to several and be XXs. once is had always several this I'm we'll to allow as live looking this mentioned,

So future. we and investments the we mentioned, which digital had international investments, in

position our our broaden Russia, operating excited #X to is Atlantic drive Zhara, in investment our music that market truly broaden our the -- in just cements to Russia now as into quarter, Russia, fast-growing is allow about. an label This roster, independent us A&R, us allowing which that further really as player we're a was just

as Africa, Some really and Middle our future. areas other We're the streaming, international just of in see the online. markets and digital is like high-growth East investments, it for we specifically coming

it's the throughout reach on And foothold the launched repertoire ground so us distributor we've whether extends Middle market our Chocolate we in market an just to owned local in Nigeria with our allows and the in there in capabilities. distribution Africori have in offices us expanding investment Middle build have East, operated similarly, and our And and labels that repertoire or so City the to East. allows that

in in group We have our operation pan-regional. Turkey. launched an Beirut label works that We've

that the to allows distribution region, to Rotana Our of market. have the strong take relationship their music global leading to rapidly of us segment a of in both a us have partnership advantage allowing in mid-East player rights market, growing the also with outside but

as So opportunities markets we find are opportunities and with growth that monetization look become for to invest the online coming in real. their streaming to continue emerging

are very financial on We really focused there's a return. where investing

edge, really a with how noting and streams to markets doing leaders the that to and So the Roblox, ecosystem. we're live experiment monetizations, with Genies. invest in the some investments monetization long-term of in music invested also in on both These into and and of to And obviously, we it we've and the in we're with artists. are the finding that be are rewarding the those around model right activate reaching the that's digital digital also all growth, lot these satisfying music Wave, activations. try ecosystem, Both millions sure digital we identify to fans has fast-growing them our attention world, but people the to getting doing want making deserves, is really front

these So of across engaged kind Michael. we're really Thanks, of fronts. all

Operator

Bank from next America. Jessica question Our comes Ehrlich Reif with of

Jessica Reif

A couple of questions.

in couple some growth contribute your And going then general? organic there's that appetite And it much about add? couple a last did point, multiples? given Publishing, of I at quarters. that's And secondly, First, is, Music on How How did guess, Music for physical you this Japan? versus much physical elevated in still the was Can surprisingly of all acquisitions deal strong. Publishing a a for day you feels acquisition the like years. for been year? that what's much outlook talk Was how this had acquisitions

Eric Levin

some Steve, Sure. could I you if at color can the this, tackle and you whatever strategic of want, add on end.

So for physical, is growth quarter, look, a a growth strong physical. physical. we segment Vinyl had quarter a XX% within growth

activations unlock for really that we're so potential. releases looking And to and

that which very especially will potential, CDs, Mac's about and specifically terrific would strong are say, expect physicals market vinyl, market also be classic growing. that Publishing, that that's will Young's was in to Steve But Japan. Japan, Jessica, did based in don't overall, I into to CD had our market Overall, to was in that cautious is tap -- add very release tackle an we've Neil the catalog attractive I decline. we to should hard physical. The allowed on Monkey Yellow year, have $XX both M&A, because of have Fleetwood On The I of Rumours decline, strong EBITDA. its on There we in still think from contributed But adjusted releases us Music a transactions opportunity to working but In suspect earlier schedule well. release as through million that? from rereleases why to is we but be last to release want long-term this Some we still maximize quarters. I

are their able them early Publishing, are develop those. obviously, a with we've Warner well. a were additive to pitch they -- And would both So quarter just them sign that in cowriters, skills, we songwriting very, But say, strong full-service operator their We in growth had to careers, artists. I very their superstar Music in excluding other help songwriters with Chappell. pair songs them help as

the across points not do world, deals. look around part Chappell. the make. business our that find the other other deal market. we're pass happening deals at to financial across But that We shortage investments of there we when do have our are all the opportunities if of return attractive disciplined in deals And threshold yes, the we're geographies lot investor. that we is attractive at active and But think found have relative is the they able profile acquirer, we of genres, return no there. all And return. close very because to are passed, ever and deals we huge our look gets are to deals at the also Warner a a just So And We proper developing. an to in that will relative us come to

I answered Steve, We Warner a to shortage grow want are to not know anything you to there's finding Chappell's I question. of investment but if I continue business. don't opportunities think attractive the add,

Steve Cooper

Yes. Jessica, points. all of on acquisitions. engaged think the been Eric in I these we high touched But have

of of buyers. have are be we this an to people is is investments of many managed. market portfolios these the the fact we And to the these of these coming to actually assets into pure that one third-party the importantly, But As providing the making matter these of provide array because most financial acquirers management these of are services are services players.

operations the out. discipline, we we operations. assets will emphasize also and is thoughtful only crimp that disciplined create point that buying from when severely but from two, have about not cash really to do top very financial and like flow remains to healthy. Number flow bottom it's And it's at one cash line very, line, are grow our our things multiples we I'd to ensure or what to So of the that the not

some a So very deals metrics candidly, go we can't and at when look our these deals make at we say, look we look at, to we the healthy our that of multiples because of at cost those we've and We cash And maintain to from work. them we pay shareholders. got operations. We've capital. can't a make real dividends flow got work them

So figure some in marketplace, question. we really take these ways of optimize of Hopefully, all answers that if we out how pass. the just a can't your right deals to the in

Operator

question Our Sanford from Juenger next comes Bernstein. with Todd

Todd Juenger

really love one hear Probably I've got to topic. Steve's just thoughts.

X all first-party things Eric, right? data. data. the think, data, your chime platforms is least digital I'm well, world, services -- -- So all developing in, their and just about an have are especially sorts The a The you non-COVID are the business And and platforms data. data to I artists, and who fans and and listeners developing a at social own repositories ticketing live-event are few in of your world, too. you in have some, this sure developing own mean, managers channel of and listening I DSPs developing your have streaming might gaming data. to are developing are you name Obviously, partners increasingly sort of topic

is the a So valuable. question I guess my investors perception is this among or there's topic that data the very

in might in here that this valuable is is true? of where to of sort it value to partners you of especially -- ever more And your is particularly Do to how you of forms making redundant have consideration? So some you I other -- data ensuring to are that for of access you it? And or partners? audience paying have? other any is you with need sets? Eric, explicitly valuable, financial you guess, a to agreements if Or part you that obtaining sure of find versus data? be your agreements access the in may And lot nice assets of how this your from data Are come data are any for this that, you stuff a you are with that's in

Steve Cooper

this. all I on So why sure which and I am you can start, points, make the Eric, don't then

we data billion process give that's So of a growing. Todd, lines the you and Warner X to sense Group, every just day, of Music

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lot have you to that? when add Eric, data So a is data, mantras Incidentally, the no does whenever in deals deal. is to of may our want handled answer way value. proper of do we one unequivocal a no

Eric Levin

power add have data, experts a is on we The add decision most series want right only to in use the really or that I money. was thought -- real-time. decisions I thing want just Steve, of all to this tools our which make supplement do thing is our the I efficient only is that help The to and

our which should that's executives tool, help music potentially music to A&R are and flickering sign stages see and develop getting meet their just early that our is at which artists we careers. started to artists allows Sodatone, have We and the A&R which their and see

performance music to which is and use most their tool. our That market. OPUS, see of how to the in artists resources performing music the use drive allow driving the best we marketing market in tool where so have to both is efficient, We about how portals artist already Steve decide to marketing helps market. our we're us that's have it music that and mentioned where that in the promote

tools. We have song-pitching

tools. sync have We

continue make we sources that a we're So And effective running can. to the in upgrade us. these using in are we're ways make sure our driving that to to we business to outcomes tools have data internally we of sure data that way most hundreds series our of across tools our externally and use real generated both and generated

Operator

Our comes next from Securities. question Truist with Matthew Thornton

Matthew Thornton

if I I quick really Maybe a couple could, ones guess.

for kind is, one, I you -- Steve, of guess maybe question DSPs first of DSPs have other first prices. midst to price follow streaming So why obviously, increases raising or any wouldn't sense your my there expectation The from whether the to through will is in flow And is any And suit? Spotify, kind reason in parallel business? relatively, my commensurately as do the to demand any have as that's things then as and pent-up second just festivals, live I'm you of concerts, there COVID. can wondering any cetera? out around if Any great. of would of point to there? Anything come et pent-up be evidence color you talk live recover maybe we question music. demand of kind been And There's parks around around that, there's like of theme like been and of question. talk

Steve Cooper

follow first, on Well, financial of ramifications. many on the you my give up I'll can sense, and Eric the then

Let first me so. the take second

couple for the live. sellout the concerts, I'm kind demand. UFC general crowds Zealand last events New of had surge There ago was managed a the saw is for demand of view, New there a in championships. that at there's crowd in there week-or-so over think for live When opened Orleans you I sure large a pent-up Matthew, months. been

think would in on have and ways. XX is go I who making will logically down there interacting live also a or months, streams on XX, demand. will over expect watching or XX concerns, think watching So XXX and the way these numbers now XX, where a concert should virtual I pent-up if to we by also large continue XX, just conclude concerts people last changes one by -- would that habits concerns be live XX lingering during of and historically, double the created obviously I'm crowds up, behavior, will there to say to things that in COVID XX I about or wanted different

U.S. price a that I think there They be while pent-up markets, of the believe, developing lingering demand, number think markets. a around uncertainties there offerings that, may variety to the I has just emerging in because U.K. of COVID. respect and, -- So increases, some now behavioral is price increases for in changes I of With the that's Spotify announced announced their

answers don't an experiment between a be mind than so increases, of that is have -- are any. raise gap Matthew. to playlists, a gap long-term to prices eyeballs. is aware definitely any audio, video they massive, there between will on with other, for a to Matthew. that do video your these as expectation And we're erode, so to is that any add. was each as question, -- library, if may and don't what you to churn there over anything that on with audio massive think Keep par events, services that we churn DSPs I their with gains that have Eric, that add meaningful in as that that's ears should their not well. we pricing But price to proposition think they and/or what will I should audio tendency meaningful want these have for and our I value They but associated incremental begin will there you extent that others And do the Hopefully, date, pricing And or have I that is expectations about relative see for build think other believe their and video. their events, to stickiness. is see pricing never the to the think Spotify build a make time people

Eric Levin

covered it I well. very Steve, No. thought you

Matthew Thornton

I just. guess

Steve Cooper

Sorry, that? what was

Matthew Thornton

DSP there wouldn't be Question I happens when I just there a would expect clarify Eric, for parallel any the price, to -- impact any guess. that, reason want your case? that. just reason raises the that Is I in commensurately. and that to business Is

Eric Levin

would we about talk Thank say deals. just don't I specific DSP you.

participate So granular, rates and market the when general, say, but would that expect I up yes. we in retail general, to would want go get share I to that in upside, don't in incremental in

Operator

comes question Bazinet with Jason last from Our Citi.

Jason Bazinet

secular that digital growth as sort is on years, as losses. physical given underway. the X of case X points for in have a of full a roster, -- in many, Your Is it is gains what or like as of records basis, hit it think hard now get so In year in your sort sort headwind bear are happen really or collapsed, it right of a, full X business that of on words, decline points, what's is as of think and tailwind interesting to sense to a year. means a case because sort terms if or number? I was X of basis Is pivot it or And you're any of, or bull year to in bunch market a many I growth? a am X-decade that artists context you hit a other share in on reasonable say, let's

Eric Levin

I've say would multipronged, multilayered I been the for in X. it's analysis But it. say I I would to a music in Jason. it XX been -- bit that Thanks, that and now, for there's business of music, years, a certainly haven't

around it the different strong music performance music, or be XX and of can has Japan and just could in marketplace. be of to superstars one impactful, could have become Germany, releasing our of have releases that really global. can could ways impactful. markets big, Anglo drive have and world. in one, really kind music We and really global release the And very one in music a We're some series So

But that were superstars So certainly which have breaking the music that have a have you and we talking stars, an that we new we're I regional and kind impact stars of and also tools. say to on -- multiple have an global would I local opportunity really have We the to all market. think the time real developing impact. global have

And Latin U.K. and of we as so lot plan long-term Europe, in great have drive do relationships different superstars and U.S. Asia, the all and them next careers. a And to stages long-term there, and is of we in into this the and genres, market this always over across what the identify artists market world, America, hopefully, well. of for obviously, our pride across their -- ability develop the of We portfolio take and career. in generation a

in been that so. and think look business maybe do that very, a to this we are that great as expect. you I year X every if we've said, ability we deep that the So it of broad X, performance years making sure market, And And and regardless drive we and can overall, releasing have music, names growth music. the for at which confident point at our releasing the point. very a by individual doing artists But the on great we're or portfolio we're past we're move

Operator

the remarks. turn I like closing to call to would for back now over Cooper Steve

Steve Cooper

to for everybody to We'll to in today. please, good want de enjoying the months. I us a everyone time And again, So you time few talk a and safe, stay thank really taking Mayo. have Bye-bye. Cinco join

Operator

today's Thank call. participating. you concludes This for conference

may disconnect. You now

Warner Music (WMG) 8 May 212021 Q2 Earnings call transcript