Here are some notes from the Q&A portion of yesterday's WMG earnings call. Two things stodd out. First, WMG said weakness in sales has not been due to reductions in floor space. Second, CEO Edgar Bronfman was almost as cautious as Vivendi's CFO was last week in answering analyst questions about mobile growth. (Updated: Here's the transcript of the earnings call at Seeking Alpha.)

Overall economy and decline in CD sales: The weakness seen is not due to reduction in floor space but to lower traffic on the floor. WMG is happy with product it has in the marketplace and has met its ship goals for its releases. There will be opportunities for further cost reductions if it sees weaker sales. (Coolfer note: Get ready for a miserable holiday season. The wild card is how many iTunes gift cards will be gifted and what share of purchases a music company can get from them. WMG may lag because of its relatively weak release schedule through March 2009.)

Music publishing: A mix of growing businesses (performing, sync) and declining (mechanical). Mechanicals represent about 40% of revenue. WMG releases represent about 15% of Warner/Chappell releases.

Windowing strategy: Continued success across the board with bundling strategies, not just in one genre.

Retail: WMG is very confident about Wal-Mart's creditworthiness but continue to deal with challenges of creditworthiness of some smaller retailers. Has not taken any big losses and does not expect it will. Post-holiday returns are not expected to be a problem due to proactive inventory management and not over-shipping. (Coolfer note: He didn't come out and say it, but I get the feeling some retailers may be on restrictive shipping and/or credit terms due to late payments. That's a standard way to get product into stores while minimizing exposure.)

Variable pricing: iTunes has "continued to be a strong partner" with bundling, but no comment on variable pricing at iTunes. Bronfman believes it is appropriate for digital content, that not all songs are worth the same amount, that record companies should have the right to experiment with pricing. Long term, Bronfman hopes there will be more variable pricing in the industry.

Mobile: Growth of improved handset devices will bring increased consumption (both download sales and subscription revenues). Sales through iPhones is sometimes 10x or 20x higher than sales through other handsets. Bronfman called Comes With Music-type plans a "very attractive consumer offer" that device manufacturers should like as well.