Sony's Music Earnings: Overall Revenue Up; Physical Sales, Publishing Slide
Sony Corp's music operations posted an 8.2 percent increase in sales for the quarter ending June 30 of this year, to $1.374 billion (¥141.5 billion) from the $1.27 billion (¥130.2 billion) it recorded during the same period a year ago. The group's operating income dropped however, from $310 million (¥31.8 billion) in the corresponding period last year to $155 million (¥15.9 billion) in this most recent report.
Sony attributed the revenue increase to growth in streaming and increases from its visual media and platforms. Elsewhere, Sony said its music group's operating income was impacted by a couple of factors, including the "re-measurement of SME's [Sony Music Entertainment's] equity interest in [distributor] The Orchard." The company is referencing the $151 million boost to operating income it saw during the same period last year, due to a one-time write-up which re-measured the value of its stake in The Orchard. Subtracting that $151 million from the prior year's operating income leaves it with $159 million -- meaning its $155 million in operating income performance this year shows only represents a slight decline.
Moving over to digital, Sony reported that overall digital revenues increased to $461 million (¥47.279 billion), up 10 percent. Within that, download revenue fell to $162 million (¥16.661 billion), or 18.5 percent of revenue. Streaming accounted for $299 million (¥30.668 billion), up 38.4 percent from last year's $216 million (¥22.188 billion).
The company’s recorded music operations -- Sony Music Entertainment and Sony Music Japan -- saw revenue increase slightly, to $874.5 million (¥89.706 billion) from $871 million (¥89.328 billion). Music publishing revenue, meanwhile, fell 12.6 percent to $152 million (¥15.65 billion) from $174 million (¥17.844 billion.
Sony further broke out recorded music revenues by format, noting that physical sales accounted for $281 million (¥28.858 billion), 32.1 percent of total revenue, down $324 million (¥33.2 billion), or 37.2 percent of total revenue, from the previous year.
Finally, the company reported other music revenue (likely synch licensing payments and neighboring rights royalty payments) totaled $131.7 million (¥13.570 billion) or 15.1 percent, up slightly from $127 million (¥13.018 billion), or 14.6 percent.
Sony Corp. reported that sales for the entire company (not just music-related) fell to $15.66 billion (¥1.613 trillion) from $17.63 billion (¥1.808 trillion) during the quarter, while net income also fell significantly to $205 million (¥21.2 billion) from $803 million (¥82.4 billion).
Correction, 11:30am ET, Aug. 2: This article originally mischaracterized factors that contributed to a seemingly dramatic drop in operating income between 2015 and 2016. This has been corrected in the text above.