Sony Music’s labels generated nearly $4bn in revenue in the last calendar year – up 5.9% year-on-year at constant currency.
According to new financial figures posted by Sony Corp and analyzed by MBW, the company’s recorded music division generated a total of $3.85bn in the 12 months of 2017.
It will be no great surprise that streaming was the key driver in this performance.
Streaming platforms – across video and audio – contributed $1.65bn to Sony Music’s recorded music operation in the period, up 32.9% on 2016.
That equates to around $137m per month, $32m per week and $4.5m per day.
Annual physical recorded music sales fell 7.2% to $1.17bn in the calendar year, with download sales dropping by 22.6% to $467m.
As a result, streaming revenues overtook vinyl and CD in the 12 months to become Sony’s biggest annual recorded music format.
(All % figures above have all been calculated using USD converted from Yen on a constant currency basis – achieved by translating calendar 2017 and 2016 figures using the prevailing annual rates in each respective year.)
MBW is able to make these calculations because Sony has just posted its quarterly performance for its fiscal Q3 – or the fourth calendar quarter – ending December 31 last year.
In the three months, Sony posted 128.24bn Yen ($1.13bn) from recorded music in total, up 8% year-on-year at constant currency.
Streaming contributed 43% of this figure, with 55.54bn Yen ($492m) coming from the format in the three months – up 32.1% year-on-year.
Physical formats stayed reasonably strong in the Holiday quarter, generating 43.66bn Yen ($386m), down 6.1% year-on-year.
Quarterly download sales tumbled at a faster rate, however – falling to 12.75bn Yen ($113m) – down 16.3% year-on-year.
The company’s best-selling artist projects (by revenue) in the period were led by P!nk’s Beautiful Trauma (pictured).
Other Top 5 earners included three Japanese titles – Nogizaka46’s Itsuka Dekiru Kara Kyou Dekiru, Keyakizaka46’s Kaze Ni Fukarete and Kenshi Yonezu’s Bootleg – in addition to Chris Brown’s Heartbreak on a Full Moon.
Sony’s music publishing operation – which includes Sony/ATV in addition to Sony Music Publishing Japan – posted fiscal Q3 revenues of 18.3bn Yen ($162m), up 14.1% at constant currency.
Sony’s overall music division – including recorded music, publishing and ‘visual media and platform – posted quarterly sales of 218.4bn Yen ($1.93bn), up 18.4% at constant currency on the prior year.
The division also posted a 39.3bn Yen ($348m) quarterly operating profit, up 36% year-on-year at constant currency.
However, a significant chunk of this revenue/profit rise was down to ‘Visual Media and Platform’ sales – especially Fate/Grand Order, a game application for mobile devices.
(All % figures above have all been calculated using USD converted from Yen on a constant currency basis – achieved by translating the company’s fiscal Q3 2017 and 2016 figures by the prevailing quarterly rates in each respective year.)
Further note: MBW has reverse-engineered Sony’s quarterly financials from Japanese Yen into US dollars at the prevailing exchange rate of fiscal Q3 2017 (113 Yen per USD in 2017; 109.3 Yen per USD in 2016).
For calendar year results, we have used the average prevailing rates for Jan-Dec in each year (112.2 Yen per USD in 2017; 108.8 Yen per USD in 2016).
By applying these exchange figures to both 2016 and 2017, we effectively get a US-leaning constant currency picture of Sony Music’s performance in both cases.
It isn’t a perfect system; it risks overplaying the major record company’s global business slightly by converting a chunk of revenues from Sony Music Entertainment Japan (which would usually be straight-reported in Yen) into US dollars.
But it provides us with a cleaner reflection of the performance of New York-based Sony Music Entertainment outside of FX distortion – and, therefore, shows what’s really happening under the hood of the business run by CEO Rob Stringer.Music Business Worldwide