Sony and Warner both post profit and revenue rises

The overseas parent companies of Sony Music Entertainment and Warner Music posted profit and revenue rises in their latest financials.

According to Sony Corp, profit rose for Sony Music Entertainment, Sony Music Entertainment Japan, and its stake in Sony/ATV Music Publishing.

Sony’s music business saw a 32.5% rise in operating profit to 21.7 billion yen (A$236 million), and a 14.4% revenue growth to 144.7 billion yen ($1.5 billion) year-on-year in its 2013 fiscal Q3 – ending December 31.

Sony attributed much of the rises to the “favourable impact of the depreciation of the yen against the US dollar” while also noting the growing strength of EMI Music Publishing.

It singled out albums by One Direction, Beyoncé, Miley Cyrus, Celine Dion and Kelly Clarkson as its best sellers in the period.

On a constant currency basis, revenues dipped 1%, but were offset by the continued growth of digital sales.

Sony Corp’s strategy to restore its profit is working. After a $2.1 billion net loss the year before, in the nine months to December 31 it reported 1.948 trillion yen ($21 billion) in revenue, an operating income of 46.4 billion yen ($505 million) and a net loss of 10.8 billion yen ($117 million). Its strong movers were the new PlayStation 4, smartphones and a rise in revenue from movies.

Warner Music Group’s acquisition of Parlophone Records is paying off. Revenue in its fiscal first quarter – ending December 31 – was up 6% to US$815 million. The Parlophone Label Group’s contribution to this was $74 million. (Without Parlophone, Warner’s revenue would have declined by 3.6%). After a loss of $80 million in the same quarter of 2012, Warner Music narrowed its loss this time to $37 million. Its operating income was $15 million, compared to the $51 million in the corresponding period of 2012.

WMG CEO Stephen Cooper admitted that the company’s releases in the first quarter were “light”. He promised releases would be stronger in the second half of the year, but did not divulge what these would be. Music publishing revenue rose 10.3% to $128 million. Digital revenue was up by 8.2% to $276 million, primarily due to streaming in the recorded music division – a growth area for the company, Cooper pointed out.

Licensing contributed $78 million, while artist services and expanded rights brought in $84 million, driven by an increase in concert promotion revenue – primarily in Italy, France and Germany.

Recorded music turned over $691 million, a 5.2% increase. Although digital has overtaken physical CDs in markets such as United States and northern Europe, globally-speaking, CDs remained dominant. They were worth $273 million of revenue, compared to the $256 million from digital.