Tool & Lil Nas X help Sony Music reach another billion-dollar quarter

Major labels are doing just fine after a decade of digital disruption, thanks for asking.

Financials released by Japan’s Sony Corp revealed that its recorded music division generated another billion dollars in its second fiscal quarter, attributing most of the rise to streaming.

The music division incorporates Sony Music Entertainment, Sony/ATV Publishing, Sony Japan and the mobile-game dominated Visual Media/Platform.

The breakdown showed that sales revenue grew 6.4% year-on-year to ¥112.2 billion (A$1.44 billion) between July and September.

The biggest selling release was Tool’s Fear Inoculum which topped the US charts in August after selling 270,000 units in its first week. Of these 248,000 were physical units.

The album also reached #1 in Australia, as well as in New Zealand, Belgium and Norway.

Photo: Lil Nas X performs with Billy Ray Cyrus

Fear Inoculum was followed by Lil Nas X’s Panini, Chris Brown’s Indigo, Khalid’s Free Spirit and Kang Daniel’s Colour on Me.

Operating income was ¥37.5 billion ($498.5 million), which translated to a 19% uptick from the second quarter in 2018.

Streaming revenue was at ¥66.8 billion ($888.4 million), which the company said was a rise of 16.9% in Q2 2018 (on a constant currency conversion basis).

This managed to offset a flat result from physical at ¥20.3 billion ($269.5 million) while downloads slipped a further near-10% to ¥8.8 billion ($115.9 million).

Interestingly, the lack of a physical decline by Sony reflected a similar trend at Universal Music this year.

Streaming made up 59.5% of recorded music, physical sales represented 18.1%, downloads were 7.9% and others were 14.5%.

The music publishing operation – Sony/ATV, Sony Music Publishing Japan and the recently-acquired EMI Music Publishing – posted revenue of ¥38.41 billion ($$518.6 million).

Licensed revenue from public performance and broadcast, sync with merchandising and live performance income contributed an additional ¥16.2 billion ($215.9 million).

In the first nine calendar months of 2019, Sony’s recorded music revenues hit $4.36 billion, or an extra $199.9 million year-on-year.

Sony Corp’s movie division also had a bright quarter, with ‘Spider-Man: Far From Home generating A$1.59 billion globally.

But its games business showed a slowdown as interest in Fate/Grand Order waned.