What changed in this filing

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Item 1. Business

2021-11-23 compared with 2020-11-23 · 86 added, 83 removed, 451 unchanged (27% of the section changed)

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In connection with the Merger, the Company delisted its common stock from the New York Stock Exchange (the “NYSE”).

The Company continued to voluntarily file with the U.S.

Securities and Exchange Commission (the “SEC”) current and periodic reports that would be required to be filed with the SEC pursuant to Section 15(d) of the Exchange Act as provided for in certain covenants contained in the instruments covering its outstanding indebtedness.

Initial Public Offering

On June 5, 2020, the Company completed an initial public offering (“IPO”) of 77,000,000 shares of Class A common stock of the Company, par value $0.001 per share (“Class A Common Stock”) at a public offering price of $25 per share.

The Company listed these shares on the NASDAQ stock market under the ticker symbol “WMG.” The offering consisted entirely of secondary shares sold by Access Industries, LLC (collectively with its affiliates, “Access”) and certain related selling stockholders.

On July 7, 2020, the Company completed the sale of an additional 11,550,000 shares of Class A Common Stock from the selling stockholders to the underwriters of the Company’s IPO pursuant to the exercise by the underwriters of their option to purchase additional shares of Class A Common Stock.

The Company did not receive any of the proceeds of the IPO or exercise of the underwriters’ option.

Following the completion of the IPO and the exercise in full of the underwriters’ option to purchase additional shares, Access and its affiliates held an aggregate of 421,450,000 shares of Class B common stock of the Company, par value $0.001 per share (“Class B Common Stock”), representing approximately 99% of the total combined voting power of the Company’s outstanding common stock and approximately 83% of the economic interest.

On June 5, 2020, the Company went public again and completed an initial public offering (“IPO”) of Class A common stock of the Company, par value $0.001 per share (“Class A Common Stock”).

The Company listed its shares on the NASDAQ stock market under the ticker symbol “WMG.” The offering consisted entirely of secondary shares sold by Access Industries, LLC (collectively with its affiliates, “Access”) and certain related selling stockholders.

Following the completion of the IPO, Access and its affiliates continue to hold all of the Class B common stock of the Company, par value $0.001 per share (“Class B Common Stock”), representing approximately 98% of the total combined voting power of the Company’s outstanding common stock and approximately 76% of the economic interest.

As a result, the Company is a “controlled company” within the meaning of the corporate governance standards of NASDAQ.

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Our entrepreneurial spirit and passion for music has driven our recording artist and songwriter focused innovation for decades.

Our Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars and Cardi B, generated $3.810 billion of revenue in fiscal 2020, representing 85% of total revenues.

Our Recorded Music business, home to superstar recording artists such as Ed Sheeran, Bruno Mars, Cardi B and Dua Lipa, generated $4.544 billion of revenue in fiscal 2021, representing 86% of total revenues.

Our Music Publishing business, which includes esteemed songwriters such as Twenty One Pilots, Lizzo and Katy Perry, generated $761 million of revenue in fiscal 2021, representing 14% of total revenues.

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The tools to make and distribute music are at every musician’s fingertips, and today’s technology makes it possible for music to travel around the world in an instant.

This has resulted in music being ubiquitous

and accessible at all times.

This has resulted in music being ubiquitous and accessible at all times.

Against this industry backdrop, the volume of music being released on digital platforms is making it harder for recording artists and songwriters to get noticed.

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We have championed new business models and empowered established players, while protecting and enhancing the value of music.

We were the first major music entertainment company to strike landmark deals with important companies such as Apple, YouTube and Tencent Music Entertainment Group, as well as with pure-play music technology companies such as MixCloud, SoundCloud and Audiomack.

We were the first major music entertainment

company to strike landmark deals with important companies such as Apple, YouTube and Tencent Music Entertainment Group, as well as with pure-play music technology companies such as MixCloud, SoundCloud and Audiomack.

We adapted to streaming faster than other major music entertainment companies and, in 2016, were the first such company to report that streaming was the largest source of our recorded music revenue.

Looking into the future, we believe the universe of opportunities will continue to expand, including through the proliferation of new devices such as smart speakers and the monetization of music on social media and other platforms.

We believe advancements in technology will continue to drive consumer engagement and shape a growing and vibrant music entertainment ecosystem.

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These strategies include investing more heavily in recording artists and songwriters, growing the Company’s global reach, augmenting its streaming expertise, overhauling its systems and technological infrastructure, and diversifying into other music-based revenue streams.

The purchase of Parlophone Label Group (“PLG”) in 2013 strengthened the Company’s presence in core European territories, with recording artists as diverse as Coldplay, David Bowie, David Guetta and Tinie Tempah.

That acquisition was followed by other investments that further strengthened the Company’s footprint in established and emerging markets.

Other milestones include the Company’s acquisitions of direct-to-audience businesses such as entertainment specialty e-tailer EMP (as defined later in this Annual Report), live music application Songkick and youth culture platform UPROXX.

Other milestones include the Company’s acquisitions of direct-to-audience businesses such as entertainment specialty e-tailer EMP Merchandising, live music application Songkick and youth culture platform UPROXX.

Industry Overview

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According to the International Federation of the Phonographic Industry (“IFPI”), global consumers spent 18.4 hours listening to music each week in 2020.

Demographic trends and smartphone penetration have been key factors in driving growth in consumer engagement.

Demographic trends and digital music penetration have been key factors in driving growth in music consumption.

Younger consumers typically are early adopters of new technologies, including music-enabled devices.

According to Nielsen, in 2019, 58% of teens in the United States between the ages of

13 and 17 and 45% of millennials in the United States between the ages of 18 and 34 used their smartphones to listen to music on a weekly basis, as compared to a 40% average for all U.S.

Furthermore, in 2019, U.S.

teens and millennials listened to an average of 32.6 and 29.7 hours of music each week, respectively, above the 26.9 hours for all U.S.

According to Nielsen, in 2019, 58% of teens in the United States between the ages of 13 and 17 and 45% of millennials in the United States between the ages of 18 and 34 used their smartphones to listen to music on a weekly basis, as compared to a 40% average for all U.S.

According to IFPI, in 2020, smartphones were the device on which people listened to most music and comprised 40% of all music listening time across all age groups, up from 29% in 2019.

Smartphones were followed by music listening on computers (19.2%), on the radio (13.4%), on a music system / hi-fi or turntable (7.9%), with portable Bluetooth speakers or smart speakers comprising 7.6% of all music listening in 2020.

Additionally, according to IFPI, in the physical sales space, vinyl revenues grew for the 14th consecutive year in 2020, and it was the number one selling physical music format in 17 countries (up from 10 in 2019).

Members of older demographic groups are also increasing their music engagement.

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Recorded Music

The recorded music industry generated $20.2 billion in global revenue in 2019 and has consistently grown since 2015, according to IFPI.

IFPI measures the recorded music industry based on four revenue categories:

digital (including streaming), physical, synchronization and performance rights.

Digital is the largest, generating $12.9 billion of revenue in 2019, representing 64% of global recorded music revenue.

Within digital, streaming generated approximately 88% of revenue, or $11.4 billion, with the remainder of digital revenue coming from other formats such as downloads.

Overall, digital grew by 18% in 2019, with streaming increasing by 24%.

The recorded music industry generated $21.6 billion in global revenue in 2020, according to IFPI, which represents a year-over-year increase of 7.4%, marking the sixth consecutive year of growth.

According to IFPI, global recorded music revenue has grown at a CAGR of 8% since 2016.

IFPI measures the recorded music industry on a global scale based on five revenue categories:

streaming, downloads and other digital (excluding streaming), physical, synchronization and performance rights.

Streaming is the largest of these categories, generating $13.4 billion of revenue in 2020, representing 62% of global recorded music revenue.

Within streaming, subscription audio streams generated approximately 74% of revenue, or $9.9 billion, with the remainder of streaming revenue coming from ad-supported audio streams and video streams, which generated 26% of revenue, or $3.5 billion.

Overall, streaming grew by 19.9% in 2020 as compared to 2019.

Physical represented approximately 19% of global recorded music revenue in 2020, with growth in formats such as vinyl partially offsetting declines in CD sales.

Performance rights revenue represents the use of recorded music by broadcasters and public venues, and represented approximately 11% of global recorded music revenue in 2020.

Downloads and other digital revenue represented approximately 6% of global recorded music revenue in 2020.

Synchronization revenue is generated from the use of recorded music in advertising, film, video games and television content, and represented 2% of global recorded music revenue in 2020.

According to IFPI, global recorded music revenue has grown at a 9% CAGR since 2015.

Global Recorded Music Industry Revenues 2016 to 2020 ($ in billions)

From a geographical standpoint, the largest markets for recorded music in 2020 were the United States, Japan, the United Kingdom, Germany, France, South Korea, China, Canada, Australia and the Netherlands.

The graphic below sets out the top ten markets and their respective revenue growth for 2020.

We believe the following secular trends will continue to drive growth in the recorded music industry:

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According to IFPI, global paid music streaming subscribers totaled 443 million at the end of 2020.

While this represents an increase of 34% from 255 million in 2018, it still represents less than 11% of the 3.2 billion smartphone users globally, according to Statista.

It also represents a small fraction of the user bases for large, globally scaled digital services such as Facebook, which reported 2.7 billion monthly users across its services as of September 2020, and YouTube, which reported over two billion unique monthly users as of May 2019.

On-demand streaming (both audio and video) reached 1.15 trillion streams in the United States in 2019, according to Nielsen, and this growth is expected to continue.

While this represents an increase of 30% from 341 million in 2019, it still represents less than 12% of the 3.6 billion smartphone users globally in 2020, according to Newzoo.

It also represents a small fraction of the user bases for large, globally scaled digital services such as Facebook, which reported 2.9 billion monthly users across its services as of September 2021, and YouTube, which reported over 2.3 billion unique monthly users as of October 2021.

On-demand audio streaming reached 870 billion streams in the United States in 2020, according to Nielsen, and this growth is expected to continue.

According to Nielsen, as of July 2020, 51% of adults in the U.S.

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There also remains substantial opportunity in emerging markets, such as Brazil and India, where smartphone penetration is low compared to developed markets.

For example, according to Statista, smartphone penetration for Brazil and India as of September 2019 was 46% and 25%, respectively, compared to 79% in the United States.

For example, according to Statista, smartphone penetration for Brazil and India as of December 2020 was 51% and 32%, respectively, compared to 82% in the United States.

China, in particular, represents a substantial growth market for the recorded music industry.

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Streaming services are already at the early stages of experimenting with price increases.

For example, in 2018, Spotify increased monthly prices for its service in Norway.

In addition, in 2019, Amazon launched Amazon Music HD, a high-quality audio streaming offering that is available to customers at a premium price in the United States.

For example, in 2020 Spotify increased monthly prices for its services in Australia and several European and South American markets, and in 2021 Spotify increased prices in the U.S., the U.K.

and other European markets.

Spotify has reported positive early results, having seen no meaningful impacts to churn or customer intake in these markets.

We believe the value proposition that streaming provides to consumers supports premium product initiatives.

Technology Enables Innovation and Presents Additional Opportunities

Technological innovation has helped facilitate the penetration of music listening across locations, including homes, offices and cars, as well as across devices, including smartphones, tablets, wearables, digital dashboards, gaming consoles and smart speakers.

These technologies represent advancements that are deepening listener engagement and driving further growth in music consumption.

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Format and Monetization Model Innovation.

Short-form music and music-based video content has grown rapidly, driven by the growth of global social video applications such as TikTok, which features 15-second videos often set to music.

TikTok has reportedly been downloaded more than two billion times since its launch in 2017 and has a global monthly active user base of nearly 700 million as of August 2020.

Short-form music and music-based video content has grown rapidly, driven by the growth of global social video applications such as TikTok, which features short videos often set to music.

According to Sensor Tower, TikTok was the most downloaded and highest grossing non-game app globally in the first half of 2021, reaching nearly 383 million first-time installs.

Such applications have the potential for mass adoption, illustrating the opportunity for additional platforms of scale to be created to the benefit of the music entertainment industry.

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Fitz & the Tantrums quickly topped the international music charts in South Korea and surpassed one billion streams in China.

Short-form music and music-based video content have also become increasingly popular on social media platforms such as Facebook and Instagram, further illustrating the growing number of potential pathways through which recording artists may gain consumer exposure.

Short-form music and music-based video content have also become increasingly popular on social media platforms such as Facebook, Instagram and YouTube (through its recent introduction of “Shorts”), further illustrating the growing number of potential pathways through which recording artists may gain consumer exposure and grow connections with their fans.

Music Publishing

Music publishing involves the acquisition of rights to, and the licensing of, musical compositions (as opposed to sound recordings) from songwriters, composers or other rights holders.

According to Music & Copyright, the music publishing industry generated $5.9 billion in global revenue in 2020, representing an approximate 5.2% increase from $5.6 billion in 2019 (following an increase in global music publishing revenues of 2% from 2018 to 2019).

Music publishing involves the acquisition of rights to, and the licensing of, musical compositions (as opposed to sound recordings) from songwriters, composers or other rightsholders.

Music publishing revenues are derived from four main royalty

mechanical, performance, synchronization and digital.

Music publishing revenues are classified by Music & Copyright as coming from four main royalty sources:

and synchronization.

In 2020, digital, which accounted for approximately 55% of global revenue, represented the largest and fastest-growing component of industry revenues, while performance, which accounted for approximately 20%, represented the second-largest component of industry revenues.

Synchronization accounted for approximately 17% of global revenue in 2020.

Mechanical revenues from traditional physical music formats (e.g., CDs, DVDs, downloads), which accounted for approximately 8% of global revenue in 2019, have continued to fall while digital revenues have grown to offset this decline.

Mechanical revenues from traditional physical music formats (e.g., vinyl, CDs, DVDs), which accounted for approximately 7% of global revenue in 2020, have continued to fall while digital revenues have grown to offset this decline.

Global Music Publishing Industry Revenues 2016 to 2020 ($ in billions)

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European Union Copyright Directive.

In 2019, the European Union (“E.U.”) passed legislation which will rein in safe harbors from liability for copyright infringement and rebalance the online marketplace to ensure that rightsholders and recording artists are remunerated fairly when their music is shared online by user-uploaded content services such as YouTube.

In 2019, the European Union (“EU”) passed legislation which will rein in safe harbors from liability for copyright infringement and rebalance the online marketplace to ensure that rightsholders and recording artists are remunerated fairly when their music is shared online by user-uploaded content services such as YouTube.

Our Competitive Strengths

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By comparison, from fiscal year 2016 to fiscal year 2020, our recorded music streaming revenue grew at a CAGR of 28% and increased as a percentage of our total recorded music revenues from 33% to 63%.

We believe our innovation-focused operating strategy with an emphasis on genres that over-index on streaming platforms (e.g., hip-hop and pop) has consistently allowed our digital revenue growth to outpace the market, highlighted by our becoming the first major music entertainment company to report that our streaming revenue was the largest source of recorded music revenue in 2016.

We believe our innovation-focused operating strategy with an emphasis on genres that over-index on streaming platforms (e.g., hip-hop and pop) has consistently allowed our digital revenue growth to keep pace with the market, highlighted by our becoming the first major music entertainment company to report that our streaming revenue was the largest source of recorded music revenue in 2016.

The growth of streaming services has not only improved the discoverability and personalization of music, but has also increased consumer willingness to pay for seamless convenience and access.

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We have also strengthened our Warner Music Asia executive team with new appointments and promotions.

According to IFPI in 2019, recorded music industry revenues in Asia and Australasia grew 3% and 7%, respectively, year-over-year.

Over the same period and on a constant-currency basis, we grew revenues in Asia and Australasia by 26%, again outpacing the industry.

With every region around the world at different stages in transitioning to digital formats, we believe establishing creative hubs by opening new regional offices and partnering with local players will achieve our objective of building local expertise while delivering maximum global impact for our recording artists and songwriters.

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Differentiated Platform of Scale with Top Industry Position.

With over $4 billion in annual revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music.

With over $4.5 billion in annual recorded music revenues, over half of which are generated outside of the United States, we believe our platform is differentiated by the scale, reach and broad appeal of our music.

Our collection of owned and controlled recordings and musical compositions, spanning a large variety of genres and geographies over many decades, cannot be replicated.

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The development of our vibrant roster of recording artists has been informed by our significant experience in being able to adapt to changes in consumer trends and sentiment over time.

Our creative instincts yield custom strategies for each and every one of our recording artists, including, for example:

• Cardi B, whose first Atlantic Records single “Bodak Yellow” was a break-out hit that has been certified nine times Platinum in the United States by the RIAA;

• Twenty One Pilots, whose rise to stardom accelerated with the release of their second Fueled by Ramen studio album, Blurryface ;

The Man, which celebrated its first entry on the Billboard Hot 100 chart after the release of their eighth studio album, Woodstock , featuring the track “Feel It Still.”

Our creative instincts yield custom strategies for each and every one of our recording artists.

In addition, Warner Chappell Music boasts a diversified catalog of timeless classics together with an ever-growing group of contemporary songwriters who are actively contributing to today’s top hits.

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Strong Financial Profile with Robust Growth, Operating Leverage and Free Cash Flow Generation.

For fiscal year 2018 through fiscal year 2020, we have grown as-reported revenues at a CAGR of 6%, and on a constant-currency basis, at a CAGR of 7%, driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions, partially offset by the impact of the business disruption resulting from the COVID-19 pandemic in fiscal 2020.

For our fiscal year 2020, our business generated net loss and Adjusted EBITDA of $470 million and $837 million, respectively, implying an Adjusted EBITDA margin of approximately 19%.

For fiscal year 2019 through fiscal year 2021, we have grown as-reported revenues at a CAGR of 9%, and on a constant-currency basis, at a CAGR of 9%, driven by secular tailwinds, organic reinvestment in A&R and strategic acquisitions, partially offset by the impact of the business disruption resulting from the COVID-19 pandemic.

For our fiscal year 2021, our business generated net income and Adjusted EBITDA of $307 million and $1,090 million, respectively, implying an Adjusted EBITDA margin of approximately 21%.

We believe our financial profile provides a strong foundation for our continued growth.

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Our management team has successfully designed and implemented our business strategy, delivering strong financial results, releasing an increasing flow of new music and establishing a dynamic culture of innovation.

At the same time, our management team has driven an increase in operating margins and cash flow through an improved revenue mix to higher-margin digital platforms and overhead cost management, while maintaining financial flexibility to both organically invest in the business and pursue strategic acquisitions to diversify our revenue mix.

flexibility to both organically invest in the business and pursue strategic acquisitions to diversify our revenue mix.

Our Recorded Music and Music Publishing businesses are led by entrepreneurial and creative individuals with extensive experience in discovering and developing recording artists and songwriters and managing their creative output on a global scale.

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We recognize that music is inherently local in nature, shaped by people and culture.

In 2019, at least 80% of the 50 top-selling singles in Brazil, Mexico and Argentina, and at least 90% of the 50 top-selling singles in Japan and South Korea, were performed by or featured local artists.

In addition, at least 50% of the 50 top-selling singles in Sweden, Italy and the Netherlands were performed by or featured local artists, each of which reflects over 20% growth since 2016.

In 2020, at least 80% of the 50 top-selling singles in Brazil, Mexico, Argentina, Japan, and South Korea were performed by or featured local artists.

In addition, at least 50% of the 50 top-selling singles in Sweden and Italy were performed by or featured local artists.

One of our vital business functions is to help our recording artists and songwriters solve the complexities associated with a fragmented, global market of mixed musical tastes.

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We believe the growth of digital formats will continue to create new and powerful ways to distribute and monetize our music.

We were the first major music company to strike landmark deals with important companies such as Apple, YouTube, Peloton and Tencent Music Entertainment Group, as well as with pure-play music technology companies such as MixCloud, SoundCloud and Audiomack.

We were the first major music company to strike

landmark deals with important companies such as Apple, YouTube, Peloton, Twitch and Tencent Music Entertainment Group, as well as with pure-play music technology companies such as MixCloud, SoundCloud and Audiomack.

We believe that the continued development of new digital channels for the consumption of music and increasing access to digital music services present significant promise and opportunity for the music entertainment industry.

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We intend to continue to extend our technological reach by executing deals with new partners and developing optimal business models that will enable us to monetize our music across various platforms, services and devices.

We also intend to continue to support and invest in emerging technologies, including artificial intelligence, artificial reality, virtual reality, high-resolution audio, mobile messaging and other technologies to continue to build new revenue streams and position ourselves for long-term growth.

We also intend to continue to support and invest in emerging technologies, including artificial intelligence, artificial reality, virtual reality, high-resolution audio and other technologies to continue to build new revenue streams and position ourselves for long-term growth.

Pursue Acquisitions to Enhance Asset Portfolio and Long-Term Growth.

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In October 2018, we launched Elektra Music Group in the United States as a standalone label group, which comprises the Elektra, Fueled by Ramen and Roadrunner labels.

Our Recorded Music business also includes Rhino Entertainment, a division that specializes in marketing our recorded music catalog through compilations, reissuances of previously released music and video titles and releasing previously unreleased material from our vault.

Our Recorded Music business also includes Rhino Entertainment, a division that specializes in marketing our recorded music catalog primarily through reissuances of previously released music and video titles and releasing previously unreleased material from our vault.

We also conduct our Recorded Music business through a collection of additional record labels including Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Nonesuch, Parlophone, Reprise, Sire, Spinnin’ Records, Warner Classics and Warner Music Nashville.

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Under these agreements, we provide services to and participate in recording artists’ activities outside the traditional recorded music business such as touring, merchandising and sponsorships.

We have built and acquired artist services capabilities and platforms for marketing and distributing this broader set of music-related rights and participating more widely in the monetization of the artist brands we help create.

We have built and acquired artist services capabilities and platforms for marketing and distributing this broader set of

music-related rights and participating more widely in the monetization of the artist brands we help create.

We believe that entering into expanded-rights deals and enhancing our artist services capabilities in areas such as merchandising, VIP ticketing, fan clubs, concert promotion and management has permitted us to diversify revenue streams and capitalize on other revenue opportunities.

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We maximize the value of our catalog of recorded music through our Rhino Entertainment business unit and through activities of each of our record labels.

We use our catalog as a source of material for re-releases, compilations, box sets and special package releases, which provide consumers with incremental exposure to familiar music and recording artists.

We use our catalog as a source of material for re-releases, box sets and special package releases, which provide consumers with incremental exposure to familiar music and recording artists.

Rhino Entertainment also releases new music from legacy recording artists and markets and promotes the name and likeness of certain artist estates and brands.

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Typically, such contracts entitle us to fewer albums, and, of those, fewer are optional albums.

In contrast to new artists’ contracts, which customarily give us ownership in the artist’s work for the full term of copyright, some established artists’ contracts provide us with an exclusive license for some fixed period of time.

In contrast to new artists’ contracts, which, with certain territorial or other exceptions, customarily give us ownership in the artist’s work for the full term of the copyright or a long-term exclusive license, established artists’ contracts more commonly provide us with an exclusive license for some fixed period of time.

It is not unusual for us to renegotiate contract terms with a successful artist during the term of their existing contracts, sometimes in return for an increase in the number of albums that the artist is required to deliver.

With certain territorial or other exceptions, our recording contracts typically grant us ownership for the duration of copyright.

With certain territorial or other exceptions, our recording contracts with new artists typically grant us ownership in the artist’s work for the full term of copyright or a long-term exclusive license.

See “—Intellectual Property—Copyrights.” United States copyright law permits authors or their estates to terminate an assignment or license of copyright (for the United States only) after a set period of time in certain circumstances.

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We generate revenues from the new releases of current artists and our catalog of recordings.

In addition, we actively repackage music from our catalog to form new compilations.

In addition, we actively repackage music from our catalog to form new releases.

Our revenues are generated in digital formats including streaming and downloads, CD format, as well as through historical formats, such as vinyl albums.

In connection with the digital distribution of our music, we currently partner with a broad range of digital music services, such as Amazon, Apple, Deezer, KKBox, Spotify, Telefonica, Tencent Music Entertainment Group, YouTube and Google, and are actively seeking to develop and grow our digital business.

We also sell traditional physical formats through both the online distribution arms of traditional retailers such as fye.com and walmart.com and traditional online physical retailers such as amazon.com, bestbuy.com and barnesandnoble.com.

We also sell traditional physical formats through both the online distribution arms of traditional retailers such as target.com and walmart.com and traditional online physical retailers such as amazon.com, bestbuy.com and barnesandnoble.com.

Streaming services stream our music on an ad-supported or paid subscription basis.

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Our license agreements with digital music services generally last one to three years.

In fiscal year 2020, Recorded Music revenue earned under license agreements with our top two digital music accounts, Apple and Spotify, accounted for approximately 34% of our total revenues.

In fiscal year 2021, Recorded Music revenue earned under our license agreements with our top three digital music accounts, Spotify, Apple and YouTube, accounted for approximately 45% of our Recorded Music revenues.

Since the emergence of digital formats, our business has become less seasonal in nature and driven more by the timing of our releases.

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While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself.

In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business garners a share of the revenues generated from use of the musical compositions.

In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders.

The operations of our Music Publishing business are conducted principally through Warner Chappell Music, our global music publishing company headquartered in Los Angeles, and through various subsidiaries, affiliates, and non-affiliated licensees and sub-publishers.

We own or control rights to more than one million musical compositions, including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions.

Assembled over decades, our award-winning catalog includes over 80,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, techno, alternative and gospel.

Assembled over decades, our award-winning catalog includes over 100,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative and gospel.

Warner Chappell Music also administers the music and soundtracks of several third-party television and film producers and studios.

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Our Recorded Music business includes music from:

• Global superstars such as Ed Sheeran, Bruno Mars, Michael Bublé, Cardi B, Kelly Clarkson, Coldplay, David Guetta, Dua Lipa, Kenny Chesney, Neil Young, Prince, Pink Floyd, David Bowie, Phil Collins, Fleetwood Mac, Tom Petty and The Smiths.

• Next-generation talent including A Boogie wit da Hoodie, Roddy Ricch, YoungBoy Never Broke Again, Tones and I, Charli XCX, Lizzo and Bebe Rexha.

• International stars such as Anitta, Aya Nakamura, TWICE, Christopher, Pablo Alborán, Udo Lindenberg and Laura Pausini.

• Global superstars such as Ed Sheeran, Cardi B, Bruno Mars, Lizzo, Coldplay, Dua Lipa, Michael Bublé, Kelly Clarkson, David Guetta, Kenny Chesney, Madonna, Neil Young, Prince, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin and The Smiths.

• Next-generation talent including Roddy Ricch, Saweetie, Tones and I, Justin Quiles, Burna Boy, Charli XCX, Jack Harlow, Bebe Rexha, Dan + Shay, Ashnikko, PinkPantheress and CKay.

• International stars such as Anitta, Aya Nakamura, TWICE, Ava Max, Capo Plaza, Pablo Alborán, Udo Lindenberg and Laura Pausini.

Our Music Publishing business includes musical compositions by:

• Superstars such as Stormzy, Twenty One Pilots, Green Day, Katy Perry, George Michael, Chris Stapleton, Dan + Shay, Tayla Parx, Damon Albarn, Dave Mustaine and Kacey Musgraves.

• Superstars such as Madonna, William Corgan, Belly, Cardi B, Bruno Mars, Anderson Paak, Lizzo, Tones and I, Pablo Alborán, Lin Manuel Miranda, Chris Stapleton, Dan + Shay, Tayla Parx, Damon Albarn, Dave Mustaine and Kacey Musgraves.

• International talent such as Jonathan Lee, Tia Ray, Manuel Medrano, Melendi, Bausa, Shy’m, Tove Lo and Jack & Coke.

• Songwriting icons like Brody Brown, Liz Rose, Justin Tranter, busbee, The-Dream, Dr.

• Songwriting icons like Cole Porter, Grateful Dead, Quincy Jones, Marco Antonio Solís, Eric Clapton, Brody Brown, Liz Rose, Justin Tranter, busbee, The-Dream, Dr.

Dre, Stephen Sondheim, George & Ira Gershwin and Gamble & Huff.

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Our Recorded Music business is also dependent on technological development, including access to, selection and viability of new technologies, and is subject to potential pressure from competitors as a result of their technological developments.

Additionally, we compete, to a lesser extent, for disposable consumer income with alternative forms of entertainment, content and leisure activities, such as cable and satellite television, motion pictures and video games in physical and digital formats.

Additionally,

we compete, to a lesser extent, for disposable consumer income with alternative forms of entertainment, content and leisure activities, such as cable and satellite television, motion pictures and video games in physical and digital formats.

The recorded music industry is highly competitive based on consumer preferences and is rapidly changing.

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The three largest music publishing companies collectively accounted for approximately 59% of the global market in 2020 according to Music & Copyright.

According to Music & Copyright, Sony/ATV was the market leader in music publishing in 2019 with an approximately 25% share (reflecting its ownership of the EMI music publishing assets).

According to Music & Copyright, Sony Music Publishing was the market leader in music publishing in 2020 with an approximately 25% share (reflecting its ownership of the EMI music publishing assets).

Universal Music Publishing was the second-largest music publisher with an approximately 23% share, followed by us at approximately 11%.

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The duration of copyright protection for such sound recordings varies based on the year of publication, with all such sound recordings receiving copyright protection for at least 95 years, and sound recordings published between January 1, 1957 and February 15, 1972 receiving copyright protection until February 15, 2067.

The term of copyright in the E.U.

for musical compositions in all member states lasts for the life of the author plus 70 years.

In the E.U., the term of copyright for sound recordings lasts for 70 years from the date of release in respect of sound recordings that were still in copyright on November 1, 2013 and for 50 years from date of release in respect of sound recordings the copyright in which had expired by that date.

also harmonized the copyright term for joint musical works.

In the case of a musical composition with words that is protected by copyright on or after November 1, 2013, E.U.

member states are required to calculate the life of the author plus 70 years term from the date of death of the last surviving author of the lyrics and the composer of the musical composition, provided that both contributions were specifically created for the musical composition.

The term of copyright in the EU for musical compositions in all member states lasts for the life of the author plus 70 years.

In the EU, the term of copyright for sound recordings lasts for 70 years from the date of release in respect of sound recordings that were still in copyright on November 1, 2013 and for 50 years from date of release in respect of sound recordings the copyright in which had expired by that date.

The EU also harmonized the copyright term for joint musical works.

In the case of a musical composition with words that is protected by copyright on or after November 1, 2013, EU member states are required to calculate the life of the author plus 70 years term from the date of death of the last surviving author of the lyrics and the composer of the musical composition, provided that both contributions were specifically created for the musical composition.

We are largely dependent on legislation in each territory in which we operate to protect our rights against unauthorized reproduction, distribution, public performance or rental.

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Although we cannot assure you that our trademark applications, even for major trademarks, will register, we endeavor to register our major trademarks in every country where we believe the protection of these trademarks is important for our business.

Our major trademarks include Asylum, Atlantic, East West, Elektra, EMP, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Songkick, SPINNIN’ RECORDS, Warner Chappell and WEA, and their respective logos.

Our major trademarks include Asylum, Atlantic, East West, Elektra, EMP, Erato, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Songkick, SPINNIN’ RECORDS and Warner Chappell, and their respective logos.

We also use certain trademarks pursuant to a royalty-free license agreement.

The duration of the license relating to the WARNER, WARNER MUSIC and WARNER RECORDS word marks and “W” logo is perpetual, but may be terminated under certain limited circumstances, including our material breach of the license agreement and certain events of insolvency.

The duration of the license relating

to the WARNER, WARNER MUSIC and WARNER RECORDS word marks and “W” logo is perpetual, but may be terminated under certain limited circumstances, including our material breach of the license agreement and certain events of insolvency.

We actively monitor and protect against activities that might infringe, dilute or otherwise harm our trademarks.

the actions we take to protect our trademarks may not be adequate to prevent third parties from infringing, diluting, or otherwise harming our trademarks, and the laws of foreign countries may not protect our trademark rights to the same extent as do the laws of the United States.

However, the actions we take to protect our trademarks may not be adequate to prevent third parties from infringing, diluting, or otherwise harming our trademarks, and the laws of foreign countries may not protect our trademark rights to the same extent as do the laws of the United States.

Joint Ventures

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An example of this arrangement is Frank Sinatra Enterprises, a joint venture established to administer licenses for use of Frank Sinatra’s name and likeness and manage all aspects of his music, film and stage content.

Human Capital

As of September 30, 2021, we employed approximately 5,900 persons worldwide, including temporary and part-time employees as well as employees that were added through acquisitions.

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We believe that our relationship with our employees is good.

As a global music entertainment company, we recognize the strength that diversity brings to our teams.

The work we do is powered by our diverse, talented and motivated employees, and we are dedicated to cultivating a culture of belonging that supports the ability of every person to grow and thrive.

We continually invest in our employees’ career growth and provide employees with a wide range of development opportunities, including learning, mentoring, coaching and development programs.

To support employee well-being in response to the COVID-19 pandemic and the transition to full-time work from home, we established a number of programs, including flexible work schedule options, and gave employees a home office stipend and other benefits and support to care for themselves or family members impacted by COVID-19.

Corporate Information

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Our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those forms are available free of charge through our website (investors.wmg.com) as soon as reasonably practicable after they are filed with or furnished to the SEC.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Securities and Exchange Commission (the “SEC”) maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

None of the information contained on, or that may be accessed through our websites or any other website identified herein, is part of, or incorporated into, this filing.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business