Streaming now makes up 24% of Sony Music revenue

Executives at Japan’s Sony Corp are seeing the growth of its streaming revenue as an example that its music division’s bleak days are starting to see light.

Streaming made up 24% of total revenues for Sony Music’s Q3, which covered the last three months of 2015. It includes digital streaming, digital video and digital radio.

Downloads constituted 19%, which means that its total digital sales now make up 43% (up from 38% in the same quarter to December 31, 2014) is still less than physical revenue, which was 45% (down from 50%).

The remaining 12% is listed under “Other” and includes licensed revenue (public performance, broadcast and sync), as well as merchandise and live income from 360 deals. “Other” was also 12% last year.

In what is seen as a positive quarter with better results than expected by analysts, total sales by the music division rose by 8.2% to 181.2 billion yen (US$1.51 billion) – a rise of 8.2%, or 4% taking into the account of the depreciation of the yen against the U.S. dollar. The figure also includes monies from its 50% share in Sony/ATV Publishing. The music division’s profit stood at $228 million in the three months.

Sony Corp Executive Deputy President and CFO Kenichiro Yoshida said that the “significant momentum in music streaming” showed that the 15-year decline of the music industry was “finally bottoming out.”

He added, “We’re very positive [about] the growth in the streaming market. To some extent, it’s replacing the download business, but the growth is positive. “We expect it to keep going and accelerate… we expect [Sony’s] Music business to be on the rise again.”

The ten records that sold best during Q3 were Adele’s 25 (which by last month had sold 15 million worldwide, according to Forbes), One Direction’s Made In The A.M, Elvis Presley’s If I Can Dream: Elvis Presley with the Royal Philharmonic Orchestra, Bruce Springsteen’s The Ties That Bind: The River Collection, Little Mix’s Get Weird, Carrie Underwood’s Storyteller, Pentatonix’s Pentatonix, Bob Dylan’s The Cutting Edge 1965-1966: The Bootleg Series, Vol. 12, Chris Brown’s Royalty and Jeff Lynne’s ELO’s Alone In The Universe.

Overall, Sony Corp posted net income of 120.1 billion yen ($1 billion) on total revenue of 2,580.8 billion yen ($21.5 billion) — up 33.5% and 0.5% respectively year-on-year. Operating income rose 11% to 202.1 billion yen ($1.7 billion).

Its mobile business continued to struggle, with total revenue down 14.7% to 384.5 billion yen ($3.2 billion). Sony explained the decline due to its reduced production and marketing for the division.

PlayStation remains its goldmine, with video games rising 10% in revenue and up 45% in profit to 40.2 billion yen ($335 million).

The movie business contributed a profit of $170 million (up 26.9%). Imaging (digital/video cameras) revenue was down 5% to $1.6 billion but its operating profit was 20% up to $197 million. Similarly, home entertainment revenue dipped by 4.3% to $3.35 billion but profit jumped 19.8% to $260 million.

The company said in a statement: “The increase in sales on a constant currency basis is due to higher Recorded Music sales, reflecting an increase in digital streaming revenue, and higher Visual Media and Platform sales, reflecting the strong performance of a game application for mobile devices.”