WMG’s Bronfman Still Disappointed By Video Game Income

Warner Music Group (NYSE: WMG) is lining up a new range of music video games partners, as it continues to voice displeasure at terms offered by publishers of smash-hit successes like Guitar Hero and Rock Band. “We’re negotiating with others, some of whom are larger than (the) others,” CEO Edgar Bronfman Jr said regarding games during WMG’s Q3 earnings call, explaining the label also has existing licensing deals with a range of games companies.

“Where we’re not being recompensed anything close to what would be fair for artists and services, we see no reasons to licence.” And speaking about music games per se: “We don’t see that as a large foregone opportunity because the licensing opportunity in itself is so small.”

It’s not the first time Bronfman has criticized big-game publishers, previously describing licensing income from them as “paltry”; if that doesn’t increase, “we will not license to those games”.

WMG Q3 revenue was broadly flat at $861 million.

“We’re confident we’re building the most progressive company in the music business today,” the CEO told analysts. But “we’re still at early (stage) in the digital business”. Bronman said subscription music services have struggled to date due to quality of service and users’ awareness, but: “There are huge numbers of unmonetized music consumers who will be able to have access to music in large quantity or small quantity for more money or less, depending on the model … that will be a significant area of the music industry going forward.”

He expects digital sales to go in line with historical seasonal pattern: “Digital growth has flattened in the September quarter and December quarter and then grown in the March and June quarters – as new devices are sold at Christmas, the consumer base increases and number of purchases goes up.”

Bronfman’s priorities: generating free cash, “fortify our digital leadership” through existing deals and new business models, exploit Warner Chappell, expand artist partnerships (ie. 360 deals), and continue investing in A&R.