Warner Music Group did not have the best of luck with investments in 2008, losing $33 million in ventures with streaming services imeem and lala. Business Insider largely attributes WMG’s $68 million net loss in the quarter ending March 31 to these deals.
The company also took a major digital loss, taking $33 million charge “related to the impairment of cost-method investments in lala and imeem.” According to its 10-Q [Ed. note: quarterly financial report], Warner Music wrote off $16 million in imeem, more than its 2008 imeem investment of $15 million, including a $4 million receivable write-off. The company also wrote off $11 million of its $20 million investment in lala.
As Media Memo points out, this means the streaming site owes Warner Music money that the label doesn’t expect to receive, noting that last month WMG didn’t renegotiate its streaming-rights deal with the company in which it has an equity stake.
We also heard “WMG” and “bad investment” mentioned in the same breath last year when Idolator reported WMG purchased Roadrunner Records without securing Nickelback for more than one album. Don’t get us wrong, in the long run, “bad investment” is debatable with Roadrunner – it’s easily the most bankable brand in metal. But making that big of an acquisition without guaranteeing the label’s biggest asset will be bringing in revenue for years to come…eesh.
