Lil Nas X Effect: Sony's Recorded Music Sales Top $1 Billion as Streaming Revenues Climb

Overall, Sony's music operations generated $1.86 billion in sales during the company's first fiscal quarter.

Recorded music sales and publishing revenue at Sony Music both grew in the first quarter of 2019, according to the company's latest financial figures.

For the fiscal quarter ended June 30, Sony Music operations -- which includes Sony Music Entertainment, Sony/ATV, Sony Japan and the mobile-game dominated Visual Media/Platform -- reported 38.3 billion yen ($352.7 million) in operating income, a 19% rise on the same period the previous year. 

Sales revenue rose 11% to 202.3 billion yen ($1.86 billion), up from 181.5 billion yen ($1.67 billion) in the first quarter of 2018. 

Sony attributed the strong growth to a 27% rise in streaming revenues, which lifted recorded music sales to 111.9 billion yen ($1 billion), up 11% on the previous year.

It's also worth remembering that 2018's sales revenue were impacted by a change in accounting methodology, which is no longer a factor and partially contributes to this year's bounce in operating income, versus the almost 1% decline in revenue recorded music had in the first quarter of 2018 when compared to the corresponding period in 2017.

Music publishing revenues meanwhile climbed by over 80% year-on-year to 39.3 billion yen ($362 million) as a result of the consolidation of EMI Music Publishing (last year's first quarter report took place before the acquisition closed when only Sony's fee was counted as revenue and not all the royalty revenue collected). 

Breaking down recorded music revenue, physical sales were slightly down on the previous year totaling 21.9 billion yen ($201 million), a fall of around $6 million on the first quarter of 2018. Download sales also fell by just over $17 million to total $80 million.

Meanwhile, digital sales grew to 75.2 billion yen ($693 million), driven primarily by 27% growth in streaming revenues, which totaled 66.5 billion yen ($612 million) in quarter one. By comparison, streaming sales in the first quarter of 2018 were 52.2 billion yen ($480 million on a constant currency conversion basis).

License revenue from public performance, broadcast and sync, coupled with merchandising and live performance income generated an additional 14.8 billion yen ($136 million).  

Best-selling Sony Music Entertainment releases (albums and singles) during the accounting period included Khalid's Free Spirit, Lil Nas X's chart conquering "Old Town Road," Pink's Hurts 2B Human, Bruce Springsteen's Western Stars and DJ Khalid's Father of Asahd.  

The total number of songs owned and administered by Sony/ATV Music Publishing as of March 31, 2019 is listed as more than 4.5 million. 

Although recorded music and music publishing sales were up, revenues for Sony's Visual Media/Platform division, which also sits under its music operations wing, fell by 7.7 billion yen ($70 million) to 48.8 billion yen ($449 million). 

The company said lower sales for the hugely popular role-playing mobile game Fate/Grand Order, compared to the first quarter of 2018, was largely to blame.

Ed Christman contributed reporting.

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