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WMG Reports Fall In Ringtone Sales; Mobile Remains “Soft”

By Dianne See Morrison - Thu 07 Feb 2008 07:16 AM PST

Warner Music saw ringtone sales fall in the US and remain “flat” internationally in the first quarter, according to CFO Michael D. Fleisher speaking during the company’s earnings call Wednesday. Mobile remains “soft,” while new mobile products—including ringback tones, full track downloads, and other more “innovative” mobile offerings--have yet to generate “meaningful revenue.”

The company also reported that 40 percent of its worldwide digital revenue comes from mobile, meaning that mobile generated $56.4 million of the $141 million total quarterly digital revenue. In the US, online is a larger share of the company’s digital business than mobile, while internationally mobile and online are similarly sized.

As the FT reports, Warner’s admission that ringtones sales had fallen is a reminder of the struggles that music companies face as they try to shore up the loss of physical sales with digital ones. Recent reports from both Jupiter Reseach and M:Metrics have shown ringtone sales declining in both the US and in Europe.

But the company was hopeful that new devices and more integrated music service offerings from handset manufactures would boost mobile revenues. Warner Music chief Edgar Bronfman singled out the company’s recent deal with Sony (NYSE: SNE) Ericsson (NSDQ: ERIC), that will see its content on PlayNow, the handset makers over-the-air mobile download service. Bronfman praised the service’s “greatly improved user interface, content library, and functionality” which he called “key gating factors” to growing the mobile music business. Bronfman: “We are pleased to see Sony Ericsson and other mobile handset manufacturers beginning to recognize the value of music content and the importance of the consumer experience in seamlessly accessing that content on their mobile device.”

Read more about WMG’s full digital earnings at paidContent.org.

Posted in: Companies, Music Labels, WMG, Entertainment, Mobile Music

Related Research from Alacrastore.com

1 Response:
  • From mocorocker Thu 07 Feb 2008 11:35 PM

    True, as many companies and carriers report, ringtone sales are “soft” and growth has definitely plateaued (and was reported here too)… but FALL??? Geez, WMG is reeeally in shambles and their stockholders have certainly taken a savage beating (to put it nicely) for the last 18 months. Clearly whatever ‘strategy’ they have for mobile is NOT working either.

    MR

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mocoNews.net is a news site covering the business of mobile content.

Rafat Ali
Publisher & Co-Editor

Staci D. Kramer
Co-Editor

Tricia Duryee
Principal Correspondent

Dianne See Morrison
Contributing Writer

James Quintana Pearce
Contributing Writer

Robert Andrews
U.K. Editor

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