Reservoir generated $16.7m in calendar Q2 – and paid out $6m in songwriter royalties and publishing costs

New York-headquartered Reservoir [133 articles]”>Reservoir Media has this week confirmed its latest fiscal results, revealing that its total revenues in the year to end of March 2021 stood at $81.1 million – up 28% year-on-year.

In calendar Q2 (the three months to end of June), Reservoir generated $16.7 million, up 23% year-on-year.

In that same quarter – the firm’s fiscal Q1 – it generated $12.3 million from music publishing, up 8% year-on-year, and a further $4.2 million from recorded music.

That recorded music revenue haul was up 94% year-on-year, which Reservoir said was “largely due to strong physical sales on the Chrysalis Records [121 articles]”>Chrysalis catalog, the continued growth of streaming services and the acquisition of Tommy Boy Music”.

Reservoir announced it had acquired Tommy Boy for around $100 million in June.

Today’s story reflects a new level of transparency around Reservoir’s fiscal results that has arrived due to the firm floating on the NASDAQ via a merger with a SPAC (special purpose acquisition company) in July.

MBW has, naturally enough, had a little dig around Reservoir’s calendar Q2 results to see if anything else interesting springs out – and it does.



For one thing (see above), Reservoir breaks down precisely where both its music publishing and recorded music revenues came from in calendar Q2 2021.

The biggest driver of the firm’s quarterly publishing revenue in the period was ‘Digital’ on $6.65 million, followed by Performance revenues at $2.66 million.

The biggest driver of recorded music revenues was Digital, with $2.8 million, followed by physical sales, which contributed $969,000 in the quarter.

“Our recurring revenue model and growing brand put us in a strong position to capitalize on the powerful secular tailwinds we’re seeing across the music business and around the globe.”

Golnar Khosrowshahi [27 articles]”>Golnar Khosrowshahi, Reservoir

In terms of Reservoir’s combined revenues ($16.7m), just over half ($8.66m) were generated within the US, with the remainder from countries outside the United States.

Profitability-wise, Reservoir posted a $282,000 operating income in calendar Q2, and a $4.36 million OIBDA (operating income before depreciation and amortization).

Reservoir further confirmed: “Adjusting for the impact of the one-time $617.0 thousand benefit of the forgiveness of the Company’s loan under the Paycheck Protection Program during the first quarter 2021, OIBDA increased by 6% even with the additional costs… associated with preparing to be a public company.”



One last interesting tidbit: Reservoir has also broken down its costs in calendar Q2 (fiscal Q1) for investors.

Those costs included $6.02 million in “writer royalties and other publishing costs” – a figure that rose 15% year-on-year.

Writer royalties and other publishing costs as a percentage of Reservoir’s music publishing revenues in calendar Q2 increased to 49%, up from 46% for the equivalent period of 2020.

Reservoir said its decrease in margin here was “due to the change in the mix of earnings by type and songwriting clients with their specific contractual royalty rates being applied to the revenues”.

Artist royalties and other recorded music costs rose 154% year-on-year to $1.67 million, partly due to the acquisition of Tommy Boy.

Artist royalties and other recorded music costs as a percentage of recorded music revenues increased to 40% in calendar Q2 2021, up from 30% for the three months ended June 30, 2020.

“This was partly driven by the higher costs as a percentage of revenue on the increased physical revenue for the three months… as well as higher costs for distributed product”, said Reservoir.

Commenting on the calendar Q2 / fiscal Q1 results, Golnar Khosrowshahi, founder and Chief Executive Officer of Reservoir, said: “Our financial and operational accomplishments during the first [fiscal] quarter 2022 were indicative of the impressive team and momentum we have built at Reservoir.

“These accomplishments included several acquisitions that increased the strength of our catalog, as well as the expansion of our roster of songwriter and producer talent with several new signings over the last few months.

“We are the first U.S.-based publicly traded independent music company, and our recurring revenue model and growing brand put us in a strong position to capitalize on the powerful secular tailwinds we’re seeing across the music business and around the globe.”Music Business Worldwide

Source: Reservoir generated $16.7m in calendar Q2 – and paid out $6m in songwriter royalties and publishing costs

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