Warner Music revenue sinks as coronavirus slams business

Yahoo Finance's Alexandra Canal breaks down the latest outlook for Warner Music Group as artists like Beyoncé and Taylor Swift find innovative ways to release new music amid the pandemic.

Video Transcript

ZACK GUZMAN: Welcome back to live market coverage here on "The Ticker" and today's focus on fame and fortune, a hit to business. Warner Music Group, of course, one of those companies we saw come out this year and whether or not they were going to see a hit due to the coronavirus environment. I guess it looks like we got that answer. Here to chat that is Yahoo Finance's Alexandra Canal. And Alexandra, when we look at it, clearly, shares trading in the red today. Investors not liking what they're seeing.

ALEXANDRA CANAL: Yeah, so Warner Music Group reported its third quarter earnings results this morning. And they did report a pretty steep decline in revenue. The stock is dragging on that news this morning, down about three percentage points. Although, I do want to mention that that loss was less than expected, largely due to the success of streaming that has pretty much been insulated from the impact of the coronavirus pandemic.

For example, digital revenue grew 11% last quarter. In fact, streaming on sites like Spotify, Apple Music, along with digital downloads accounted for 71% of total top line revenue for the company. That's up from 61% from last year. So streaming continuing to hold its own here.

Unsurprisingly, physical revenue from music has been down due to people not being able to go out and purchase albums, although executives are saying that those various other revenue streams will most likely bounce back once the economy begins to reopen. But in the interim, artists are finding unique and innovative ways to release new music during this time period.

For example, we've had several virtual concerts out there. Beyonce released her visual album "Black is King" on Disney+ on Friday. And according to a new poll by Billboard, 76% of Billboard fans voted "Black is King" as their favorite musical release of the past week, beating out other top streaming artists like Billie Eilish, Sam Smith, and Dan and Shea. So clearly, there's still a big appetite for music right now, a big appetite for streaming.

I got to give a shout out to my girl, miss Taylor Swift. She released her new surprise quarantine album last week. And that album has just been doing bonkers.

ZACK GUZMAN: Yeah, and Taylor Swift too, I mean, she's got a lot to celebrate here too because that album topping the charts for not the first time we've seen her do as well. I mean, it's tough to find other artists out there that have been able to do with consistency what she's been able to do.

ALEXANDRA CANAL: Oh, for sure. "Folklore" just seems to be an overnight success. And it's already making history. It debuted at number one on the Billboard 200 Albums chart. And at the same time, the single from that album "Cardigan," also debuted at number one on the Billboard Hot 100 chart. Now, that makes Taylor Swift the first artist in history to have two number one debuts on both of those charts in the same week.

So clearly the girl knows what she's doing. This is her seventh number one album. And she only has eight albums in total. So it seems like whenever she releases one, it's going to hit number one. And just to put that stat in perspective, that puts Taylor Swift on par with Janet Jackson for the third most number one albums among females. They're trailing behind Madonna, who has nine number one albums, along with Barbra Streisand, who has 11. So really good company there.

But it seems like Taylor Swift, she's swiftly bringing in those wins. I had to throw the pun in there. The people love her. I listened to the whole album on a bike ride the other day. I'm a fan. And I hope she keeps them coming.

ZACK GUZMAN: Swiftly to the top, Allie Canal, really appreciate that.