Sony Music gets supercharged: new investment and spin-out into its own company coming

Sony Music is going ‘independent’: Sony Corporation has announced a restructuring plan that will see its Music division pumped with new investment – and eventually split out into its own autonomous entity.

As part of a mid-term corporate strategy update, Sony will announce today that it is focusing on its Devices, Game & Network, Pictures and Music divisions as ‘the segments that will drive profit growth over the next three years’.

At a time of thousands of job cuts at the cost-cutting Sony Corp, that spells good news for Sony Music and Sony/ATV – with their parent now willing to supercharge them with extra funding.

Indeed, Sony says that it will ‘engage in aggressive capital investment’ across Sony Music Entertainment,  in order to achieve ‘both sales growth and profit expansion’.

Sony Corp bosses said they would also be encouraging an ‘increasing focus on growth areas such as the streaming music market’.

But that’s not the biggest change on the cards for Doug Morris, Marty Bandier and co: after years of speculation, Sony Corp has firmly indicated for the first time that it will be spinning out its music division into its own entity.

“We will be sequentially splitting out the business units currently operating within Sony Corporation”

SOny Corp

Following the spin-out of its TV business last year, Sony will reveal today that it is “sequentially splitting out the business units currently within Sony Corporation” in a process that will begin by October this year.

When Music will undergo the process is currently unclear, but Sony said that the move would eventually help to define ‘clearly attributable accountability and responsibility’ as well as improving ‘the acceleration of decision-making processes and reinforcement of business competitiveness’.

The Music segment of Sony is comprised of Japan and US-based companies covering Recorded Music, Music Publishing (its 50% stake in Sony/ATV) and ‘Visual Media and Platform’ divisions.

The next area of Sony due to be spun out into its own company is its Video & Sound business unit, which will launch this year as a self-sustained, wholly owned subsidiary.

Sony’s Music division is clearly being rewarded by its parent for continuing to be a driver of income at the company. Its worldwide revenues leapt 13% in the last quarter of 2014.

Sony Corp is projecting net losses for its full fiscal year to end of March 2015 of $1.4bn (€1.2bn).

[Pictured: Pharrell Williams, who is signed to both Sony Music and Sony/ATV]Music Business Worldwide

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