Sony Corp’s Music division – including Sony Music Entertainment, Sony Music Entertainment Japan (SMEJ) and the 50% stake in Sony/ATV – reported a 35% year-on-year increase in sales to 522.6 billion yen ($5.6 billion) in the fiscal year ended March 31, 2010.
But that comparative figure was affected by the buyout of BMG’s 50% stake in Sony BMG. Sony Music Entertainment was consolidated as a wholly owned subsidiary on Oct. 1, 2008.
In a statement, Sony Corp said that if Sony Music Entertainment had been fully consolidated for the 2008-2009 fiscal year, then pro forma sales across the Sony Corp. Music division in 2008-2009 would have totaled 549.1 billion yen ($5.9 billion).
On that basis, year-on-year sales for the Music division declined 5%, while there was little change on a constant currency basis.
That 5% decline was blamed on the appreciation of the yen against the dollar as well as the continued decline of the physical music market.
Operating income increased 31% year-on-year to 36.5 billion yen ($393 million) from 27.8 billion yen ($300 million).
Again, if Sony Music Entertainment had been fully consolidated for the 2008-2009 fiscal year rather than halfway through, Sony Corp said the operating income increase for its Music division would have been 72% (or 78% on constant currency basis). Sony Corp’s half year results for 2008-2009 included equity in a net loss of 6 billion yen ($65 million) for Sony BMG.
The operating income increase was primarily due to improved results for Sony Music Entertainment and Sony Music Entertainment Japan. There were strong performing global releases by Michael Jackson, Alicia Keys and Susan Boyle.
In particular, Sony Music Entertainment benefited from hit releases, Michael Jackson catalog sales, growth in new music related businesses such as live, film and television and sponsorship revenue, as well as a year-on-year decrease in overhead and restructuring costs.
Sony Corp said the improvement at SMEJ was down to hit releases as well as year-on-year decreases in advertisement expenses and restructuring charges.
However, in its forecast Sony Corp said sales are expected to decrease and operating income is expected to “decrease slightly,” as a result of the decline in physical sales and a lower contribution to its revenues from Michael Jackson catalog compared to the last financial year.
