Mobile music remains a challenging business for Warner Music Group (NYSE: WMG), which reported today in its second quarter earnings ending March 31 that mobile remains “soft” as ringtone sales fell year over year in the US, and was flat sequentially internationally. The news was a repeat from Q1 earnings where WMG reported then that US ringtones had slipped, while international ringtone sales had plateaued. Ringback tones and full track mobile downloads failed to make up for the loss, or as WMG reported they “remain too small as yet to meaningfully impact mobile results.” The company reported digital revenues for recorded music of $155 million; 30 percent came from mobile, or $46.5 million. This is a fall of $9.9 million from Q1 where mobile revenues were $56.4 million, or a massive 17.6 percent drop. 

Other Mobile Highlights From WMG’s Conference Call:

—Looking to Japan’s Mobile Music Success: WMG CEO Edgar Bronfman said, however, that while ringtones sales remained under pressure in the US and Europe, WMG believes mobile music will be a success, especially when they looked to Japan’s mobile music business. Japan’s digital music business is almost entirely driven by mobile, thanks to speedier networks, advanced handsets, superior user interfaces, flat rate data plans, and more complete catalog offerings. In Japan, full track downloads rose 91 percent over the previous year and accounted for one-half of overall mobile music revenues. Though full track mobile downloads were currently extremely small at WMG, Bronfman said it was “growing rapidly,” including in the US.

— WMG’s Mobile Experiment With Madonna: Bronfman reported on WMG’s recent mobile deals with Vodafone (NYSE: VOD), Samsung, Verizon (NYSE: VZ) on the launch of Madonna’s recently release Hard Candy album. Vodafone released a song a day before the launch of the album, resulting in her single Four Minutes becoming the operator’s best selling track ever.

— Tethered Content Deal with Danish Telco TVC: Bronfman cited TVC’s unlimited tethered music service as “groundbreaking,” saying that this type of service was not just attractive to subscribers, but represented a “significant opportunity for us to monetize consumer behavior across cast networks.” He added they planned to pursue more of these types of mobile content models around the world.

— Mobile Represents Largest Opportunity: Bronfman said that mobile remained the industry’s “largest opportunity”—especially considering the “vast number of consumers” who have access to mobiles.

Read more on WMG’s Second Quarter Earnings at paidContent.org | Webcast Transcript Via Seeking Alpha

• Vodafone Gets Exclusive Advance Access To Madonna’s New Album Hard Candy
• WMG Reports Fall In Ringtone Sales; Mobile Remains “Soft”