Releases by Travis Scott, SZA, Harry Styles and Luke Combs, along with continued paid subscription growth, helped Sony Music Entertainment revenues hit a record 408 billion yen ($2.83 billion at the quarter’s average exchange rate) in its fiscal second quarter ended Sept. 30, up 13.7% from the prior-year period, parent company Sony Corp. announced Thursday.
The company’s previous high for quarterly revenue was 363.7 billion yen ($2.57 billion) in the third quarter of fiscal 2022 (the quarter ended Dec. 31, 2022).
Adjusted operating income grew 10.9% to 97 billion ($672 million). Adjusted OI excludes the impact of a $41.2 million one-time benefit recognized in the prior-year quarter related to settlements of copyright infringement lawsuits. The appreciation of the yen contributed some of the revenue growth in the quarter. Of the 49.4 billion yen ($342 million) revenue increase, foreign exchange accounted for a 12.7 billion yen ($88 million) gain — about a quarter of the improvement.
Recorded music revenues grew 13.3% to 253.8 billion yen ($1.76 billion) on the strength of subscription streaming services such as Spotify, Apple Music and YouTube Music. Streaming revenue grew 14.4% to 173.9 billion yen ($1.2 billion), accounting for 69% of recorded music revenues. Other revenues, which encompass merchandise, licensing and live performances, jumped 51.6% to 50.9 billion yen ($352 million). Physical revenues dropped 14.4% to 20.8 billion yen and download sales fell 42.2% to 8.2 billion yen ($57 million), although the two categories combined accounted for only 11.4% of recorded music sales.
Miley Cyrus’s Endless Summer Vacation, Beyoncé’s Renaissance, Lil Durk’s Almost Healed, Doja Cat’s Scarlet and Luke Comb’s This One’s For You were also among Sony Music’s top ten recorded music releases ranked by revenue. In Japan, Sony Music Entertainment’s top title was Social Path, a Japanese-language EP by K-pop group Stray Kids released with JYP Entertainment. Social Path hit No. 1 on the Billboard Japan Hot Albums chart for two weeks in September.
In the music publishing division, a 14.8% increase in streaming revenue helped total publishing revenue increase 12.6% to 82.7 billion yen ($573 million). Other publishing revenue, which includes mechanical, performance royalties and synch licensing, grew 9.6% to 34.3 billion yen ($237 million).
The visual media and platform division rose 5.7% to 62.9 billion yen ($436 million) and accounted for 15.7% of Sony Music’s total revenue. The division includes mobile games, software for PCs and game consoles, and sales related to software development contracts.
Sony Music increased its full-year guidance for revenue by 5%, or 70 billion yen ($485 million), and adjusted operating income before depreciation and amortization by 4%, or 15 billion yen ($104 million). The upward revisions were due to the impact of foreign exchange, increased streaming revenues in the music publishing division and higher mobile game sales in the visual media and platform division.
Financial metrics for Sony Music’s second fiscal quarter ended Sept. 30, 2023:
- Revenue of 408.7 billion yen ($2.83 billion), up 13.7% year over year.
- Adjusted operating income of 97 billion yen ($672 million), up 10.9% year over year.
- Recorded music revenue of 253.7 billion yen ($1.76 billion), up 13.3% year over year.
- Music publishing revenues of 82.7 billion yen ($573 million), up 12.6% year over year.
- Visual media and platform revenue of 62.9 billion yen ($436 million), up 5.7% year over year.