Sony’s music operations galloped to an explosive 54% gain in revenue in the the company’s first fiscal quarter ended June 30, growing to nearly 199 billion yen ($1.82 billion) as compared to the pandemic-scarred fiscal first quarter of the prior year, when revenue totaled 129.2 billion yen ($1.2 billion).
Sony’s music operations include Sony Music Entertainment, Sony Music Publishing and Sony Japan. When the company’s visual media/platform operation, which includes mobile gaming and other income streams, is added in, overall music revenues — as categorized by Sony Corp. — totaled 252.2 billion yen ($2.3 billion) for the quarter, versus 173.7 billion yen ($1.6 billion) in 2020, or a 45.2% increase.
Equally as impressive, operating income grew by 55.4% to 55.4 billion yen ($505.8 million) from the 35.64 billion yen ($331.2 million) garnered in the first fiscal quarter of 2020. That translates into an operating margin of 22%, a significant improvement from the 20.5% of revenue recorded in the year earlier period. Moreover, without last year’s one-time gain of 7.2 billion yen ($66.9 million) from the sale of a portion of shares of Pledis, a Korean label, this quarter’s operating income would mark a whopping 94.8% growth in the profit measurement for the quarter over the same period of 2020.
Streaming growth continues to be the driving force in overall growth for both recorded music and music publishing, as the format grew 60.3% to a combined total of 132.7 billion yen ($1.2 billion), as compared to 2020 when recorded music and music publishing streaming revenue combined for 82.6 billion yen ($769.6 million).
Sony cited hit titles like Harry Styles’ “Fine Line”; the Lil Nas X singles “Sun Goes Down” and “Montero (Call Me By Your Name)”; Polo G’s Hall of Fame; Lil Tjay’s Destined 2 Win; The Kid LAROI’s F*CK LOVE; Doja Cat’s Planet Her and Hot Pink; KANG DANIEL’s YELLOW; DJ Khaled’s KHALED KHALED; and Luke Combs’ What You See Is What You Get, among others, as driving revenue during the quarter.
Breaking out revenue by music operation:
—Recorded music generated 151.9 billion yen ($1.39 billion) in the first quarter, a nearly 55% increase over the first quarter of 2020 (98.1 billion yen, or $911.6 million). That translates into 76.3% of music operations, excluding the visual media/platform, up from 75.9% in the year earlier period.
—Music publishing, which includes Sony Music Publishing and Sony Japan’s publishing operations, garnered 47.1 billion yen ($430.4 million), a 51.6% increase over the 31.1 billion yen ($289 million) tallied in the year earlier period. As a percentage of music operations, again excluding visual media/platform, that equals 23.7% in the first quarter of this year, versus 24.1% in 2020’s first quarter.
Looking at the recorded music operation for the first fiscal quarter of 2021:
—Streaming revenue grew 58.4% to 109.1 billion yen (996.5 million) from 68.9 billion yen ($640.3 million)
—Downloads fell 11.1% to 6.8 billion yen ($61.7 billion) from 7.6 billion yen ($70.7 million)
—Overall digital revenue totaled 115.9 billion yen ($1.06 billion) versus 76.5 billion yen ($711.1 million), an increase of 51.4%
—Physical sales grew 63.8% to 20.8 billion yen ($189.8 million) from 12.7 billion yen ($117.9 million) in the year earlier period, when U.S. brick and mortar retail sector was completely shuttered due to the Covid-19 pandemic
—Other income streams, including merchandising, live concerts, master recording performance royalties and synchronization, totaled 15.2 billion yen ($139.1 million), a 71.5% increase from 8.9 billion yen ($82.6 million)
As a percentage of recorded music revenue, that breaks out to streaming at 71.8%; downloads at 4.5%; physical at 13.7%; and other revenue at 10%. In the prior year’s fiscal first quarter, those percentages were streaming at 70.2%; downloads at 7.8%; physical at 12.9%; and other at 9.1%.
Within music publishing:
—Streaming revenue reached 23.6 billion yen ($215.6 million), up 69.8% from 13.9 billion yen ($129.2 million)
—Other income totaled 23.5 billion ($214.8 million), a nearly 37% increase over the prior corresponding period’s 17.2 billion yen ($159.8 million)
As a percentage of publishing revenue, that breaks out to an almost 50/50 split versus the year earlier period, when the ratio ran 44.7% streaming and 55.3% other. The company also reported that its music publishing catalog now encompasses 5.03 million songs, up from 4.86 million.
Looking ahead, Sony Corp. has adjusted its forecast for the overall music segment, including the visual media/platform operation, to project annual revenues of 1.04 trillion yen and operating income of 190 billion yen. In April, the company had been projecting operating income of 162 billion yen on 990 billion yen in revenue. The company said potential upcoming revenue drivers include releases from Bleachers, Chris Young, John Mayer, Leon Bridges, Niko Moon, WALK THE MOON, Yebba and Khalid.
This story uses an exchange rate of 109.5 yen to $1 for the fiscal quarter ended June 30, 2021; and 107.6 yen to $1 for the fiscal quarter ended June 30, 2020.
