Full Description

Warner Music Group Corp. is a music content company that classifies its business interests into two areas: Recorded Music and Music Publishing. The Recorded Music business produces revenue through the marketing, sale and licensing of recorded music in various physical (such as compact disc's (CDs), cassettes, long playings (LPs) and digital versatile discs (DVDs)) and digital (such as downloads and ringtones) formats. The Music Publishing business owns and acquires rights to musical compositions, exploits and markets these compositions and receives royalties or fees for their use. The Company publishes music across a range of musical styles. The Company own or control rights to more than one million musical compositions, including a number of pop music hits, American standards, folk songs, and motion picture and theatrical compositions. In August 2008, Warner Music Group Corp. bought a majority stake in a Spanish company specializing in artist management. In September 2009, the Company announced the formation of Warner Music Nashville.

Recorded Music Business

The Recorded Music business accounted for 83% of the Company's consolidated revenues during the fiscal year ended September 30, 2008 (fiscal 2008). Recorded Music business consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. In addition to the more traditional methods of discovering and developing artists, Warner Music Group has established its Independent Label Group (ILG) to discover artists earlier in the process and at lower cost by leveraging its independent distribution network.

In the United States, recorded music operations are conducted principally through the Company's record labels, Warner Bros. Records and The Atlantic Records Group. The Recorded Music operations also include Rhino Entertainment (Rhino), a division that specializes in marketing the Company's music catalog through compilations and reissuance of previously released music and video titles, as well as in the licensing of recordings to and from third parties for various uses, including film and television soundtracks. In markets outside the United States, recorded music activities are conducted through Warner Music International division (WMI) and its various subsidiaries, affiliates and non-affiliated licensees. In most cases, WMI markets and distributes the records of those artists for whom the Company's domestic record labels have international rights. In certain countries, WMI licenses to unaffiliated third-party record labels the right to distribute its records.

The Company's Recorded Music distribution operations include Warner-Elektra-Atlantic Corporation (WEA Corp.), which markets and sells music and DVD products to retailers and wholesale distributors in the United States; Alternative Distribution Alliance (ADA), which distributes the products of independent labels to retail and wholesale distributors in the United States; Ryko Distribution, which distributes music and DVD releases from Rykodisc, Ryko's record label, and third-party record and video labels; various distribution centers and ventures operated internationally. The Company has an 80% interest in Word Entertainment, which specializes in the distribution of music products in the Christian retail marketplace, and the ADA global, which provides ADA's distribution services to independent labels outside of the United States.

Music Publishing Operations

The Music Publishing operations include Warner/Chappell, the Company's global music publishing company headquartered in Los Angeles with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Assembled over decades, its catalog includes over 65,000 songwriters and composers and a range of genres, including pop, rock, jazz, country, rhythm and blues (R&B), hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, techno, alternative, gospel and other Christian music. Warner/Chappell also administers the music and soundtracks of several third-party television and film producers and studios, including Lucasfilm, Ltd., Hallmark Entertainment, Disney Music Publishing, New Line Cinema and Warner Bros. Studios. In fiscal 2007, the Company entered the production music library business with the acquisition of Non-Stop Music.

The Company competes with EMI Music Publishing, BMG, Universal, Sony/ATV Music Publishing LLC., Universal, Sony BMG Music Entertainment, EMI Recorded Music and WMG.