Sony Music posts 13% revenue jump in Q3 as streaming thrives

Sony Music posts 13% revenue jump in Q3 as streaming thrives

Sony music entertainment Sony Music Entertainment generated north of ¥194 billion (currently $1.3 billion) during the third quarter of 2022, according to a new earnings report. Photo credit: Sony Group

Sony Music Entertainment ( SME ) posted a nearly 33 percent year-over-year increase in revenue (in addition to a 13.26 percent quarter-on-quarter increase when accounting for recording and publishing only) in the three months ending Sept. 30 , according to a recently published results report.

The Big Three label’s Q3 2022 (and Q2 FY2022) showing emerged in a performance breakdown from parent Sony Group. According to the analysis, the conglomerate’s music segment generated ¥359.32 billion (about $2.42 billion at today’s exchange rates) during the three-month stretch.

As usual, the lion’s share of revenue (¥356.93 billion/$2.41 billion) is attributed to external customers, while the remaining ¥2.39 billion ($16.13 million) derives from intersegment sales to various divisions of the Sony Group.

Also in line with Sony’s previous earnings reports, music’s total revenue includes contributions (¥59.48 billion/$401.19 million this time) from “visual media and platform” or “production and distribution of animation titles and game applications, and various service offerings for music and visual products.”

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Regardless, the aforementioned ¥356.93 billion/$2.41 billion in music revenue represents a 32.91 percent improvement from the third quarter of 2021, and the total derived solely from recorded music and publishing, ¥297.45 billion (2.01 billion dollars), reflecting a remarkable jump of 46.09 percent. from the same period in 2021.

(In addition to the increase in streaming subscription revenue described below, management highlighted the “impact of exchange rates” when explaining SMB’s strengthened sales and operating income in the third quarter, the latter of which is said to have benefited from ¥5.7 billion/38, $45 million payment from “dispute settlements received in relation to lawsuits.”)

Predictably, continued streaming growth drove a large portion of the gain, to a 34.10 percent year-over-year increase in registered music revenue in the category, to ¥151.93 billion ($1.02 billion). Executives took the opportunity to highlight that “an average of 48 of our songs ranked in the top 100 songs in Spotify’s weekly global music rankings for the first half of the current financial year,” compared to an average of 36 throughout the previous financial year.

Still, Sony Music managed to improve “other” recorded music revenue, which includes physical sales, by 67.50 percent from Q3 2021, the document shows, and the period has delivered about ¥72.03 billion ($485.70 million) in the category.

But revenue resulting specifically from CDs, vinyl and other physical products, despite growing 20.24 percent year over year, fell on a quarterly basis to 24.35 billion yen ($164.28 million), the report showed . However, Sony Music Entertainment’s download revenue (¥14.14 billion/$95.39 million) more than doubled from Q3 2021 and almost flat from Q2 2022.

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Rounding out the “other” category is ¥33.55 billion ($226.34 million) from synchronization and public performance licensing as well as merchandise; the number also more than doubled from Q3 2021 and improved by 23.03 per cent from the previous quarter.

In addition, Sony Music Publishing is said to have achieved a revenue increase of 55.34 percent year-on-year during the third quarter of 2022 by pulling down ¥73.49 billion ($495.44 million). Within the publishing total, streaming rose 26.23 percent QoQ to ¥42.19 billion ($284.52 million), per breakdown.

Sony Music’s top-selling projects (by revenue) for Q3 2022 include Beyonce’s Renaissanceharry styles’ Harry’s houseof the future I never liked youand Doja Cat’s Her planet, respectively. Looking ahead to the rest of the fiscal year (which ends March 31), management raised its annual sales guidance for the music segment to ¥1.37 trillion ($9.24 billion), in addition to raising its operating income forecast to ¥265 billion ($1.79 billion dollars).

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