Sony Music’s 2018 Sales Fall Flat as Revenue Drops Nearly 9% Over Last Year

Sony Music has released its full-year earnings report for its 2018 fiscal year, revealing that the music label has had a challenging year with a drop in revenue of 8.6% year-over-year. The company generated ¥427 billion ($3.8 billion) in recorded music revenue, and the decline has been attributed to a change in accounting and declining physical sales.

Breaking down the report, Sony Music generated ¥104.4 billion ($946.3 million) in recorded music revenue in Q4 2018, down 5.1% compared to the same period last year. Physical revenue plummeted 55.4% to ¥19.5 billion ($176.9 million), while total digital revenue grew 3.4% to ¥64.6 billion ($585 million). Download revenue declined by 31.6% to ¥9 billion ($81.5 million), while streaming revenue grew by 9.2% to ¥55.6 billion ($503.7 million). Other revenue, which includes public performance, broadcast, and sync licensing, along with merchandise, grew 15.9% to ¥20.3 billion ($184.1 million).

For the fiscal year ending March 31st, 2019, Sony Music reported a digital revenue of ¥266.8 billion ($2.4 billion), up 7.3% year-over-year. Download revenue fell by 26.9% to ¥39.3 billion ($354 million), while streaming revenue increased by 13.2% to ¥227.5 billion ($2.1 billion). Physical revenue continued to decline, plummeting by 50.8% to ¥89.6 million ($807.6 million). Other revenue, which includes public performance, broadcast, and sync licensing, along with merchandise, grew by 8.5% to ¥70.6 billion ($636.5 million).

Sony Music’s operating income (profit) for the 2018 fiscal year was ¥232.5 billion ($2.1 billion), up 82% year-over-year. Sales remained flat year-over-year, but Sony Music reported higher sales from its music publishing division, Sony/ATV, thanks to its acquisition of EMI Music Publishing.

Sony/ATV now owns and administers 2.45 million tracks, up from 2.3 million year-over-year. EMI Music Publishing owns and administers 2.08 million songs, up slightly from 2.06 million. In total, Sony now has the rights to 4.53 million tracks, up from 4.36 million year-over-year.

Travis Scott’s Astroworld was the best-selling recorded music project for the quarter ending March 31st, 2019, followed by 21 Savage’s i am > i was, Khalid’s Free Spirit, Future’s Future Hndrxx Presents: The Wizrd, and Backstreet Boys’ DNA. For the fiscal year ended March 31st, 2019, Travis Scott’s Astroworld once again emerged as the best-selling recorded music project, followed by Camila Cabello’s Camila, Luke Combs’ This One’s For You, George Ezra’s Staying at Tamara’s, and Calvin Harris’ Calvin Harris Releases.

Despite the challenges, Sony Music remains optimistic about the future and is likely to continue to invest in digital platforms, music publishing, and explore new revenue streams such as merchandise and sync licensing. The report highlights the changing nature of the music industry, with digital revenue becoming increasingly important as physical sales continue to decline. Major labels like Sony Music are adapting to the digital landscape by investing in digital platforms and streaming services.

The report also underscores the importance of music publishing in the music industry. With the acquisition of EMI Music Publishing, Sony/ATV has become one of the largest music publishers in the world, with the rights to over 4.5 million tracks. Music publishing is likely to play an increasingly important role in the earnings of major labels like Sony Music as the music industry continues to evolve.

In conclusion, Sony Music has had a challenging year with declining physical sales. However, the increase in digital revenue, particularly streaming, has helped to offset some of the losses. The company’s music publishing division, Sony/ATV, has also seen growth thanks to the acquisition of EMI Music Publishing. Sony Music remains upbeat about the future of the music industry and is likely to continue to invest in digital platforms and music publishing to drive growth.

 


Featured image by Sony Music.

2 Responses

  1. Remi Swierczek

    UMG endorsed all inclusive streaming nirvana building the future of music business!