Digital accounted for 51% of Sony Music sales in 2016

Sony Corp.’s music operations reported A$903.5 million (75.8 billion yen) on sales of $7.7 billion (647.7 billion yen) for the Japanese fiscal year that ended March 31 – and 51% of that came from digital.

Streaming, now making up 36.2% of revenue, was worth $1.73 billion (140.61 billion yen) after a 27.6% growth from the year before.

Downloads dropped 31% to $731.5 million (59.9 billion yen), and “other” made up 14.9% of revenue, or $713.3 million.

Physical sales dropped 16% to $1.6 billion (130.982 billion yen) and still make up 33.7%.

The strength of the yen meant that operating income had a 7.6% decline from the year before, when Sony’s music operations had total sales of $7.3 billion (619.2 billion yen) and operating income from $1 billion (86.5 billion yen).

Its best-selling music titles included Beyoncé’s Lemonade, various hit tracks by The Chainsmokers, and Sia’s This Is Acting.

Sony incorporates its music operation results from Sony Music Entertainment, Sony/ATV Music Publishing, Sony Music Japan, a portion of net income from its 39.8% stake in EMI Music Publishing, and Visual Media & Platform which covers its investments and money made from music used in mediums outside music.

In fact the company attributes its higher music sales (up 46% or 11% on a constant currency basis) to its popular gaming app for mobile devices in Japan, Fate/Grand Order, which has had 7 million downloads since its 2015 launch. The app is set for release in the US and Canada in the northern summer.

Revenue for just Sony Music Entertainment and Sony Music Japan fell 5.8% to $4.63 billion (388.95 billion yen) or up 4.4% on a constant currency basis.

Similarly, its publishing (Sony/ATV, Sony Music Japan, and a portion of EMI Music) saw a decline of 6.6% to $792.8 million (66.54 billion yen) but up 3.5% on a constant currency basis.

Universal Music Group posted a 1.8% growth in recorded music revenue in its last financial year (to end of December) while Warner Music Group was up 9% in the 12 months to end of September.

For the first quarter of 2017, Sony’s music division generated 5.4% more in cash to $2.1 billion (177.04 billion yen) while operating income was up 15.8% to $184.1 million (15.425 billion yen).

But, aware that the strong yen will bring down any revenue rise in streaming, Sony Corp is predicting a further 2.7% decline for the 2017 financial year, to $7.6 billion (630 billion yen).