Driven by Streaming Surge, Sony Music Posts Strong Quarter Despite Pandemic

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Courtesy Sony Music

After a rough first fiscal quarter, Sony Music saw its recorded music division post an 11% year-over-year revenue boost — a record $1.16 billion — driven by a 19% surge in streaming (in dollars). Streaming brought in $742.3 million for the quarter.

The division saw a 6.5% overall gain in revenue (in dollars) and even a 30% gain in physical sales, largely driven by Japan, and primarily by a Kenshi Yonezu greatest-hits album. Sony generated $247.5 million from physical music sales for the quarter, up more than $58 million over the same period last year.

The top three best-selling music projects during the quarter were Harry Styles’ “Fine Line,” Jawsh 685’s “Jawsh 685 Releases,” and Future’s “High Off Line,” it also cited strong sales from Polo G, Travis Scott, Doja Cat, two Luke Combs titles and Bob Dylan. The next six months are expected to involve music releases by AC/DC, Bruce Springsteen, Future, Pentatonix and Little Mix.

The combined “Other” category in recorded music, which includes sync, public performance licensing, live music revenues and merch sales, dragged down the company’s overall numbers.

However, publishing was down around 1%, with the streaming gains offset by significant drops in sync and public performance revenues.

Based on the gains, the company raised its guidance more than 16%, projecting that the operating profit of its music operations will hit $1.4. billion, “due to an expected increase in streaming revenues in Recorded Music, in addition to the expected strong performance of game applications for mobile devices and an expected increase in anime business sales in Visual Media & Platform.”

In its statement, the company wrote, “Regarding the impact from the spread of COVID-19, the release of some new music is being delayed around the world despite a gradual recovery in music recording, as a portion of artists are still unable to record songs and music videos and carry out promotional activities.

“Ticket and merchandising revenues are also decreasing, as concerts and other events are being restricted in Japan and other areas. Due to a global reduction in advertising spending, revenue from the licensing of music in TV commercials is decreasing.

“Although it also has been impacted by the reduction in advertising spending, revenue from advertising-supported streaming services is beginning to show signs of recovery due to a gradual recovery in advertising spending.”