Sony Music’s Q1 earnings point to a performance in line with industry trends when it comes to streaming (revenues up 37%) and physical product sales (down 30%). Overall, Sony’s music division enjoyed an 8% or JPY12.9 billion improvement in revenue in the quarter ending June 30, reflecting stronger visual media and platform sales, including the successful mobile game app “Fate/Grand Order” (the Music segment, which provided a 38% return on investment capital, includes recorded music, music publishing and visual media and platform).
Operating income for the Music division was up JPY32.1 billion from JPY25 billion in Q1 of 2017. The biggest decline came from physical sales, which dropped from JPY33 million to JPY22 million year-on-year. Download sales saw a slight dip, too, from JPY12.9 million to JPY10.6 million, but digital’s performance overall was offset by a rise in streaming, from JPY38.4 million to JPY51.6 million.
Also detailed in the earnings report is Sony Corp.’s completed acquisition of EMI Music Publishing from a consortium led by private equity firm Mubadala. Sony’s purchase of 60% equity interest in EMI has a price tag of $2.3 billion dollars and was put into motion in May. In July, Sony Corp. acquired the remaining 25.1% stake from the Estate of Michael Jackson for $287.5 million, making EMI a wholly-owned subsidiary of Sony. (It should be noted that Sony/ATV Music Publishing chairman Martin Bandier built EMI into a powerhouse publisher and ran the company from 1991 until 2005.)
Top Sony Music sellers for the quarter included Camila Cabello’s “Camila” album, Pink’s “Beautiful Trauma,” as well as the latest from Dave Matthews Band, Calvin Harris, Luke Combs and George Ezra. Japan, which operates as its own SMEJ division, drove much of recorded music’s overall momentum with three of the top 10 sellers. Looking ahead to future “noteworthy” projects due out before Sept. 30, the report lists new music by Barbra Streisand and Vampire Weekend.
Recently installed Sony president and CEO Kenichiro Yoshida noted that the company wants a bigger piece of the global music business.