Sony Music’s streaming hits $1b a year, after 57% jump

Streaming revenue now accounts for A$1.29 billion (or 27%) of Sony Music Entertainment’s global recorded music revenue, after a stunning 57% rise over the past 12 months.

It more than compensated for a 3% decline in downloads, now 21% of recorded music income equating to $1 billion.

Sony Music Entertainment’s streaming income rise was well over the industry’s streaming rise of 45.2%, according to the IFPI. Universal Music’s streaming revenue is $1.3 billion.

The music division’s financials were part of parent company Sony Corp’s report for the year to March 31, 2016. The commercial electronics giant’s sales and operating revenue decrease 1.3%, to ¥8.1 billion (A$94.3 million).

Its operating profit more than quadrupled to ¥294.2 billion ($3.5 billion) because of strong consumer attraction for its PlayStation 4 video games and cost cutting to its struggling smartphone business hit by a saturated global market which also affected Apple’s iPhone sales.

Music accounted for just 7.6% of Sony Corp’s sales last year, but contributed 30% of operating profit. Its music revenue, including recorded, publishing and visual media divisions hit ¥617.6 billion ($7.1 billion) – up 10.4% year-on-year. Operating profit reached ¥87.3 billion ($1 billion).

The recorded music division generated ¥412.7 billion ($4.8 billion) in the 12 month period, up 7.7%. CDs and vinyls made up 38% of sales, with digital income representing 48%.

Music publishing, made up of interests in Sony/ATV and EMI Music Publishing brought in ¥71.26 billion ($830 million), up 7.7% from last year. Chief Financial Officer Kenichiro Yoshida said, “Music publishing is one of our recurring revenue businesses, and this strategic investment was aimed at enhancing that part of our business.”

Sony Music Entertainment predicts that its music revenue will fall 11% in sales and operating revenue over the next year. The expected $2.97 million decrease in operating revenue is attributed to the impact of foreign exchange rates, and “lower recorded music sales compared to hit titles in year ended March 2016”.

The latter comment refers to a lack of another phenomenal smash hit like Adele’s 25 (which it licenses in some parts of the world including North America through its Columbia imprint) and the $198.6 million windfall from The Orchard re-measurement, in which it has a 51% stake.

Adele’s 25 was its biggest title, after it sold 8 million in North America and 15 million globally (not all on Sony labels).

The rest of its Top 10 year sellers were One Direction’s Made In The A.M., David Bowie’s Blackstar, Meghan Trainor’s Title, Sia’s 1000 Forms Of Fear, Elvis Presley’s If I Can Dream: Elvis Presley With The Royal Philharmonic Orchestra, Future’s DS2, Bruce Springsteen’s The Ties That Bind: The River Collection and Congolese born French rapper and singer Maitre Gims’ Mon coeur avait raison.