* Fiscal Q4 loss/shr $0.31 vs year-ago $0.12 loss
* Revenue $752 mln vs Wall St forecast of $731.7 mln
* Top FY sellers include Linkin Park, Michael Buble
* Signs Spotify European deal, no deal in U.S. yet
* Shares down 7 pct
By Yinka Adegoke
NEW YORK, Nov 17 Warner Music Group WMG.N
posted a wider quarterly loss as revenue growth in Britain and
Italy was offset by weakness in the United States, Japan and
the rest of Europe, sending its shares down 8 percent.
The world's third-largest music company, said digital
revenue grew 7 percent during the fiscal fourth quarter that
ended Sept. 30, but it was hurt by the continued precipitous
drop in demand for CDs.
Chief Executive Edgar Bronfman said despite the challenges
he remains confident that the music industry will turn the
corner and soon start to benefit from years of restructuring
"Given all the work that we've done to both diversify our
revenue mix, increase our opportunities for revenue and reduce
our fixed costs, the turnaround of our business will be
significant and rapid," Bronfman said on a conference call with
Bronfman said Warner Music had signed a new European deal
with the popular music streaming service Spotify, which has
more than 10 million users in Europe.
Spotify is yet to launch in the United States as Warner
Music and its rival labels, including Vivendi's (VIV.PA)
Universal Music Group, Sony Music Entertainment (6758.T) and
EMI Group [LNDONJ.UL], have worried about whether the free
service will convert enough fans to paying customers for the
premium service. Executives are also concerned Spotify could
potentially cannibalize download sales on services like Apple
Inc's (AAPL.O) iTunes store.
"The question has always been how to ensure that
free-to-consumer models which are generally supported by
advertising and offered to attract consumers are effective at
converting consumers to paid subscriptions," said Bronfman.
He said the new Spotify agreement in Europe "more closely
aligns out economics with Spotify."
Strategic changes at Warner Music, to cope with
ever-falling CD sales, has led to the company to diversify its
revenue streams. It said digital and non-traditional revenue,
which includes the company's concert promotion business,
together accounted for nearly 40 percent of total revenue in
the last quarter.
For the fiscal fourth quarter, the company posted a loss of
31 cents a share, compared with a loss of 12 cents a share in
the year-ago period.
The loss included 23 cents in one-time charges related to
severance charges following management changes at its Warner
Bros label. Analysts were expecting a loss of 13 cents a share,
according to Thomson Reuters I/B/E/S.
Revenue fell 13 percent to $752 million, but was above
market estimates of $731.7 million.
The top sellers in the quarter included Linkin Park, Phil
Collins and The Zac Brown Band, in addition to two Japanese
artists -- Kobukuro and Superfly.
For the full year, major sellers included Michael Buble,
Jay-Z, Linkin Park, Muse and the "New Moon" soundtrack album.
Warner Music shares, which have risen about 30 percent
since the company's last quarterly report in August, were down
7.3 percent in afternoon trading to $5.43 on the New York Stock
(Reporting by Yinka Adegoke; Jennifer Robin Raj in Bangalore;
Editing by Anne Pallivathuckal and Tim Dobbyn)