What changed in this filing

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Item 1. Business

2022-11-22 compared with 2021-11-23 · 79 added, 79 removed, 458 unchanged (26% of the section changed)

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Consumers today engage with music in more ways than ever.

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

According to the International Federation of the Phonographic Industry (“IFPI”) Engaging with Music 2021 report, global consumers spent 18.4 hours listening to music each week in 2021.

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.

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).

According to IFPI’s Engaging with Music 2021 report, in 2021, the rapid emergence of short-form video, livestreaming and in-game experiences drove new opportunities in music.

Of the time people spent using short-form video apps, 68% involved music-dependent videos.

In addition, 29% of the surveyed population had watched a music livestream such as a concert in the last 12 months, and in gaming, 31% of gamers have attended a virtual concert on platforms like Fortnite, Roblox, or Minecraft.

Additionally, according to IFPI, in the physical sales space, for the first time in 20 years, there was growth in the physical market.

Revenues increased by 16.1% to $5 billion.

This was partly driven by a recovery in physical retail which had been heavily impacted in 2020 by the COVID-19 pandemic.

Revenues from CDs grew for the first time this millennium and there was particularly strong engagement with the format in Asia.

At the same time, the recent resurgence of interest in vinyl continued with very strong revenue growth in 2021 of 51.3% (up from 25.9% growth in 2020).

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

According to an IFPI survey of 19 leading geographic markets in 2019, 54% of 35- to 64-year-olds used a streaming service to listen to music in the past month, representing an increase from 46% in 2018, which was the highest rate of growth for use of streaming services across all age groups.

According to an IFPI survey, users of paid accounts as a percentage of all streaming service users rose from 38% to 47% of those surveyed between 2019 and 2021, with growth seen across all demographics.

While 55- to 64-year-olds using streaming services remained the age group least likely to use a paid streaming service, they saw the fastest uptake in growth in relative terms.

Music permeates our culture across age groups, as evidenced by the footprint that music has across social media.

According to the Recording Industry Association of America (“RIAA”), as of September 2022, 6 out of the top 10 most followed accounts on Twitter belong to musicians, and according to YouTube, the majority of videos that have achieved more than one billion lifetime views as well as the top 10 most watched videos of all time, belong to musicians.

Further, according to MusicWatch Inc., 77% of music consumers across all age groups used social media for music in 2021.

The music industry as a whole is currently undergoing a transformation driven by Gen Z.

According to Luminate, Gen Z is investing more time and money on music when compared to the average music listener.

They spend 21% more hours and spend 18% more money on music annually compared to the average music listener.

Gen Z listeners are also 28% more likely to pay for premium music subscriptions.

One in four Gen Z listeners who are not currently paying for a streaming service intend to begin paying for one in the next 6 months.

Recorded Music

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.

The recorded music industry generated $25.9 billion in global revenue in 2021, according to IFPI, which represents a year-over-year increase of 18.5%, marking the seventh consecutive year of growth.

According to IFPI, global recorded music revenue has grown at a CAGR of 11% since 2017.

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Overall, streaming grew by 24.3% in 2021 as compared to 2020.

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

Physical represented approximately 19% of global recorded music revenue in 2021, with growth in both vinyl and CD sales.

Performance rights revenue represents the use of recorded music by broadcasters and public venues, and represented approximately 9% of global recorded music revenue in 2021.

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Global Recorded Music Industry Revenues 2017 to 2021 ($ 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.

From a geographical standpoint, the largest markets for recorded music in 2021 were the United States, Japan, the United Kingdom, Germany, France, China, South Korea, Canada, Australia and Italy.

The graphic below sets out the top ten markets and their respective revenue growth for 2021.

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While this represents an increase of 19% from 443 million in 2020, it still represents less than 14% of the 3.9 billion smartphone users globally in 2021, 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.

(calculated across four demographic cohorts—Generation Z, Millennials, Generation X and Baby Boomers) reported that they are spending more time with music during the COVID-19 pandemic.

Further, according to Nielsen, 56% of adults in the U.S.

who added an entertainment subscription during the COVID-19 pandemic added a music streaming subscription, and 87% of those who added a music subscription intend to keep the music subscription after the pandemic passes.

It also represents a small fraction of the user base for large, globally scaled digital services such as Facebook, which reported 3.0 billion monthly users as of September 2022, and YouTube, which reported over 2.5 billion monthly users as of September 2022.

Additionally, Instagram reported 1.5 billion monthly users while TikTok reported 1.0 billion monthly users.

On-demand audio streaming reached 1.13 trillion streams in the United States in 2021, according to Luminate (formerly MRC Data/Billboard).

The potential of global paid streaming subscriber growth is demonstrated by the penetration rates in early adopter markets.

Approximately 58% of the population in Sweden, where Spotify was founded, was estimated to be paid music subscribers in 2021, according to Goldman Sachs.

This compares to approximately 27% and 18% for established markets such as the United States and Germany, respectively.

Moreover, paid digital music subscribers in Japan, the world’s second-largest recorded music market in 2020 according to IFPI, still only represented approximately 8% of the population, according to Goldman Sachs.

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 December 2020 was 51% and 32%, respectively, compared to 82% in the United States.

This compares to approximately 38%, 35% and 30% for established markets such as the United States, United Kingdom and Germany, respectively.

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

According to Goldman Sachs, paid streaming penetration for Brazil and India in 2021 was 12% and 1%, respectively.

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

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According to Goldman Sachs, paid streaming models are at an early stage in China, with an estimated 8% paid streaming penetration rate in 2021.

Despite its substantial population, China was the world’s seventh-largest music market in 2020, having only broken into the top 10 in 2017.

Despite its substantial population, China was the world’s sixth-largest music market in 2021, having only broken into the top 10 in 2017.

Opportunities for Improved Streaming Pricing

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

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.

For example, in 2021 Spotify increased prices in the United States, the UK and other European markets.

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

In 2022, Apple Music increased prices of its student plans in the United States, the UK and Canada, and Amazon Music Unlimited increased the prices of both its individual and family subscription plans.

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

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

Device Innovation.

According to Nielsen, as of July 2020, U.S.

consumers listened to music across an average of 3.7 devices per month.

We believe that the use of multiple devices is expanding listening hours by bringing music into more moments of consumers’ lives, and the different uses these devices enable are also broadening the base of music to which consumers are exposed.

The music that consumers listen to during a commute may be different than the music they listen to while they exercise, and different still than the music they play through a smart speaker while cooking a meal.

Smart speakers enable consumers to access music more readily by using their voices.

According to PwC, smart speaker ownership is expected to increase at a 38% CAGR from 2018 through 2023, to 440 million devices globally in 2023.

The adoption of smart speakers in the United States has been strong, and according to Nielsen, 27% of music listeners today use a smart speaker to listen to music in a given month.

In addition, according to Nielsen, 39% of Generation Z and 38% of millennials own a smart speaker.

Smart speakers are fueling further growth in streaming, by converting more casual listeners into paid subscribers, drawn in by music as a critical application for these devices.

According to Nielsen, 61% of U.S.

consumers who use a smart speaker weekly to listen to music currently pay for a subscription as well.

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 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.

According to Sensor Tower, TikTok was the most downloaded app globally in the first half of 2022, surpassing 3.5 billion all-time downloads.

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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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., 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.

In 2021, digital, which accounted for approximately 57% of global revenue, represented the largest component of industry revenues, while synchronization, which accounted for approximately 18%, represented the second-largest and fastest-growing component of industry revenues.

Performance accounted for approximately 17% of global revenue in 2021.

Mechanical revenues from traditional physical music formats (e.g., vinyl, CDs, DVDs), accounted for approximately 6% of global revenue in 2021.

Global Music Publishing Industry Revenues 2017 to 2021 ($ in billions)

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In 2018, the enactment of the MMA in the United States resulted in major reforms to music licensing.

The MMA improves the way digital music services obtain mechanical licenses for musical compositions, requires the payment of royalties to recording artists for pre-1972 sound recordings streamed on digital radio services such as SiriusXM and Pandora, and provides for direct payments of royalties owed to producers, mixers and engineers when their original works are streamed on non-interactive webcasting services.

The MMA improves the way digital music services obtain mechanical licenses for musical compositions, requires the

payment of royalties to recording artists for pre-1972 sound recordings streamed on digital radio services such as SiriusXM and Pandora, and provides for direct payments of royalties owed to producers, mixers and engineers when their original works are streamed on non-interactive webcasting services.

C opyright Royalty Board (“CRB”).

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In 2018, the CRB issued its determination of royalty rates and terms, significantly increasing the royalty rates paid for sound recordings in the United States by SiriusXM from 2018 through 2022, and the MMA extended that increase through 2027.

In 2022, The National Music Publishers’ Association (“NMPA”), the Nashville Songwriters Associations International (“NSAI”) and the Digital Media Association (“DiMA”) announced a settlement regarding the U.S.

mechanical streaming rates for 2023-2027.

The agreement sets the headline royalty rate for this period at 15.35% of total revenue, which will be introduced gradually over the course of the five-year term.

Earlier in 2022, songwriters and publishers won a raise in streaming headline royalty rates from 10.5% to 15.1% over the 2018-2022 period.

The headline rates escalate from 15.1% of total revenue in 2023 to 15.2% in 2024 and then a half a percentage point increase in each of the remaining three years, peaking at 15.35% in 2027.

This settlement will also change other important factors in U.S.

mechanical streaming rates, including increases to per-subscriber minimums and Total Content Costs (“TCC”).

According to the joint announcement of the deal, this also “modernizes” the way music streaming-related product and service bundles are treated and has updated its rules on how streaming services can incentivize potential subscribers.

European Union Copyright Directive.

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We believe consumer adoption of paid streaming services still has significant potential for growth.

For example, according to Goldman Sachs, in 2019, approximately 43% of the population in Sweden, an early adopter market, was paid music subscribers.

For example, according to Goldman Sachs, in 2021, approximately 58% of the smartphone users in Sweden, an early adopter market, was paid music subscribers.

This illustrates the opportunity to drive long-term growth by increasing penetration of paid subscriptions throughout the world, including important markets such as the United States, Japan, Germany, the United Kingdom and France, where paid subscriber levels are lower.

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We have expanded our global footprint over time by acquiring independent recorded music and music publishing businesses, catalogs and recording artist and songwriter rosters in China, Indonesia, Poland, Russia and South Africa, among other markets.

In addition, we have increased organic investment in heavily populated emerging markets by, for example, launching Warner Music Middle East, our recorded music affiliate covering 17 markets across the Middle East and North Africa (“MENA”) with a total population of 472 million people, by acquiring Qanawat, one of the largest independent distributors in MENA, and by investing in Rotana, one of the leading independent labels in MENA.

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

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.

For example, we recently invested in one of Nigeria’s leading music entertainment companies, Chocolate City, and music from this influential independent company’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services.

For example, we recently acquired one of South Africa’s

leading independent music labels, Coleske, and music from this influential label’s recording artists and songwriters will join our repertoire and receive the support of our wide-ranging global expertise, including distribution and artist services.

Differentiated Platform of Scale with Top Industry Position.

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

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 fiscal year 2020 through fiscal year 2022, we have grown as-reported revenues at a CAGR of 15% 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 2022, our business generated net income and Adjusted EBITDA of $555 million and $1,196 million, respectively, implying an Adjusted EBITDA margin of approximately 20%.

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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.

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

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.

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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The acquisition of PLG in 2013 significantly strengthened our worldwide roster, global footprint and executive talent, particularly in Europe.

The acquisition of 300 Entertainment in 2022 strengthened and diversified Elektra Music Group by adding a hip-hop focused label which led to the subsequent launch of 300 Elektra Entertainment, or 3EE, a frontline label group that brings together the multi-genre power of 300 Entertainment and Elektra.

In addition, we have made several smaller strategic acquisitions aimed at expanding our artist services capabilities in our Recorded Music business, including EMP, one of Europe’s leading specialty music and entertainment merchandise e-tailers;

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

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.

IFPI considers the global recorded music market in seven distinct regions.

In 2021, five out of these seven regions achieved double-digit growth with MENA being the fastest growing region at 35% revenue growth followed by Latin America at 31% revenue growth.

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.

We have found that investment in local music provides the best opportunity to understand these nuances, and we have made it a strategic priority to seek out investment opportunities in emerging markets.

For example, we opened an office in the Middle East and North Africa region to prepare for the forecasted rise in smartphone penetration and projected uptake in digital music.

For example, we opened an office in the MENA region to prepare for the forecasted rise in smartphone penetration and projected uptake in digital music.

These investments are made with the purpose of increasing our understanding of local market dynamics and popularizing our current roster of recording artists and songwriters around the world.

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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, Twitch 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 plan to continue selectively pursuing acquisition opportunities while maintaining financial discipline to further improve our growth trajectory and drive operating efficiencies with increased free cash flow generation.

With respect to our Music Publishing business, we have the opportunity to generate significant value by acquiring other music publishers and extracting cost savings (as acquired catalogs can be administered with little incremental cost), as well as by increasing revenues through more aggressive monetization efforts.

through more aggressive monetization efforts.

We will also continue to evaluate opportunities to add to our catalog or acquire or make investments in companies engaged in businesses that we believe will help to advance our strategies.

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In the United States, our Recorded Music business is conducted principally through our major record labels—Atlantic Records and Warner Records.

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.

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, and in December 2021, we acquired 300 Entertainment and subsequently launched 300 Elektra Entertainment, or 3EE, a frontline label group that brings together the multi-genre power of 300 Entertainment and Elektra.

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.

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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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Increasingly, we are also expanding our participation in image and brand rights associated with artists, including merchandising and sponsorships.

Our labels scout and sign talent across all major music genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, alternative, folk, blues, gospel and other Christian music.

Our labels scout and sign talent across all major music genres, including pop, rock, jazz,

classical, country, R&B, hip-hop, rap, reggae, Latin, alternative, folk, blues, gospel and other Christian music.

Internationally, we market and sell U.S.

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In accordance with the terms of the contract, the recording artists receive royalties based on sales and other uses of such recording artists’ music.

We customarily provide up-front payments to recording artists called advances, which are recoupable by us from future royalties otherwise payable to such recording artists.

We also typically pay costs associated with the recording and production of music, which in certain countries are treated as advances recoupable by us from future royalties.

Our typical contract for a new recording artist covers a sufficient number of master recordings to constitute a single initial extended-play record (known as an EP) or an album and provides us with a series of options to acquire subsequent albums from the artist.

We customarily provide upfront payments to recording artists called advances, which are recoupable by us from future royalties otherwise payable to such recording artists.

We also typically pay costs associated with the recording and production of music, which in many countries are treated as advances recoupable by us from future royalties.

Our typical contract for a new recording artist covers a sufficient number of master recordings to constitute an extended-play record (known as an EP) or an album and provides us with a series of options to acquire subsequent albums from the artist.

Royalty rates and advances are often increased for subsequent albums for which we have exercised our options.

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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 with new artists typically grant us ownership in the artist’s work for the full term of copyright or a long-term exclusive license.

Many of the recording contracts we currently enter into are expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues associated with those artists.

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 are also continuing to transition to other forms of business models with recording artists to adapt to changing industry conditions.

Marketing and Promotion

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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.

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 and YouTube, 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 target.com and walmart.com and traditional online physical retailers such as amazon.com, bestbuy.com and barnesandnoble.com.

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We attempt to minimize the return of unsold product by working with retailers to manage inventory and SKU counts as well as by monitoring shipments and sell-through data.

We enter into license agreements with digital music services to make our music available for access in digital formats (e.g., streaming and downloads).

We enter into agreements with digital music services to make our music available for access in digital formats (e.g., streaming and downloads).

We then provide digital assets for our music to these services in an accessible form.

Our license agreements with these services establish our fees for the distribution of our music, which vary based on the service.

Our agreements with these services establish our fees for the distribution of our music, which vary based on the service.

We typically receive accounting from these services on a monthly basis, detailing the distribution activity, with payments rendered on a monthly basis.

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

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.

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

In fiscal year 2022, Recorded Music revenue earned under our agreements with our top three digital music accounts, Spotify, YouTube and Apple, accounted for approximately 43% 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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Our Recorded Music business includes music from:

• 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.

• 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, Red Hot Chili Peppers, Prince, Pink Floyd, David Bowie, Fleetwood Mac, Aretha Franklin and The Smiths.

• Next-generation talent including Megan Thee Stallion, Jack Harlow, Roddy Ricch, Saweetie, Paulo Londra, Burna Boy, Bebe Rexha, Zach Bryan, Ashnikko, PinkPantheress and CKay.

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

Our Music Publishing business includes musical compositions by:

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

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

• Songwriting icons like David Bowie, Cole Porter, Grateful Dead, Led Zeppelin, Quincy Jones, George Michael, 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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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 and Warner Chappell, and their respective logos.

Our major trademarks include 300 Entertainment, ADA, 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.

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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.

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 provided employees with a home office stipend and other benefits and support to care for themselves or family members impacted by COVID-19.

Corporate Information

11 unchanged sentences

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