William Drewry - Credit Suisse First Boston
...just wondering on the publishing business given where you are with that, your interest level in acquisitions in that business? It seems like there's major assets on the market but there's also potentially a lot of smaller assets out there to be consolidated as well. Thanks very much.
Edgar Bronfman - CEO
... we don't comment on potential acquisitions, but I will say that when we acquired Warner Music we were very much delighted to acquire with that both the recorded music business and the publishing business. We are big believers in the publishing business. As we've mentioned before we are very focused on turning that business around after some years of under investment, both under Time Warner's leadership and as we said, some modest reinvestment even in the first year of our ownership. We will be looking at potential acquisitions as assets become available.
Eric Handler-Lehman Brothers
...You've previously alluded to a four quarter lag for publishing. Given this point last year is when the recording business started to take off, are we at an inflection point here for publishing?
Michael Fleisher - CFO, PAO and EVP
On the publishing business, I think what we have said is there's anywhere from a 12 to 24 month lag; the investments we're making are primarily in new artists. When you sign a new artist to a publishing deal. If you think about the lag you've got to have that artist first produce their content. Then have it be put out. And then go through the very long lag process of those publishing revenues actually clearing back to us as a publisher. So, that's why it's typically a 12 to 24 month period.
It's also important to note because I think you were sort of implying a tie to our recorded music business success only a portion of our publishing artists are our recorded music artists. Our publishing business looks like a cross-section of recorded music artists from us and many of our competitors. Though, in the two years we've been here there's a much closer tie between the publishing business and the recorded music business and making sure that we're signing up the great talent that we're investing in so heavily on the recorded music side as well.
Eric Handler - Lehman Brothers
... Will you see improvements in music publishing revenues organically excluding the benefits you've gotten from acquiring libraries? When should we actually look for improvements in that music publishing revenue line? Is that still something that's going to take a few quarters from where we are now? I just would just love to get a sense of timing. Thanks.
... we do expect Warner/Chappell to return to revenue growth in '07. We don't give specific financial guidance and so I don't know which in which quarter that will occur. But clearly, we've been at this for a year, it takes about 12 to 24 months. So at some point in '07, we do expect to see a return to growth at Warner/Chappell.