Sony Music Entertainment Posts Double-Digit Q3 2023 Revenue Growth Despite Physical Sales Decline

sony music entertainment earnings q3 2023
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sony music entertainment earnings q3 2023
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A breakdown of Sony Music Entertainment streaming revenue, for recorded as well as publishing, by quarter. Photo Credit: Sony Group Corp.

Sony Music Entertainment (SME) has reported a more than 13% year-over-year (YoY) revenue improvement for 2023’s third quarter – the second quarter of the company’s 2023 fiscal year – despite experiencing a slowdown in physical sales.

The Big Three label’s showing across July, August, and September of 2023 came to light in a newly published earnings report from the overarching Sony Group Corp. Worth noting at the outset is that the below conversions reflect the current dollar-yen exchange rate, with one of the former equal to over ¥150.

Of course, the weak yen factored into Sony Music’s Q3 earnings specifics, which identify an average conversion rate of ¥144.4 per dollar.

Overall, Sony Group attributed ¥408.72 billion (currently $2.70 billion) in Q3 2023 revenue to its music operations, representing a close to 14% YoY boost. As usual, though, the sum includes both sales to external customers and sales to other Sony subsidiaries, with the latter having come in at ¥9.36 billion ($61.84 million) on the quarter.

Also as usual, revenue from “visual media and platform” made its way into the music figure. Referring to income from mobile gaming and more, the category produced ¥62.90 billion ($415.56 million) during Q3 and can safely be omitted to paint a clearer picture of actual music revenue.

Consequently, Sony Music external revenue for 2023’s third quarter, including recorded music and publishing, was ¥336.46 billion ($2.22 billion), according to the resource. As initially mentioned, that’s up about 13.12% (as compared to the music total sans visual media and platform) from the identical stretch in 2022.

Sony Music Earnings Q3 2023 – Recorded Music

Digging into the 2023 figure, Sony Music is said to have turned in ¥173.86 billion ($1.15 billion) in recorded music streaming revenue (up about 14.43% YoY and 5.44% quarterly) as well as ¥79.88 billion/$527.75 million (up roughly 10.90% YoY) in other recorded revenue.

Behind the other classification, physical products like vinyl and CDs generated ¥20.84 billion/$137.68 million (down 14.39% YoY), against ¥8.17 billion/$53.98 million (down 42.18% YoY) for permanent downloads including ringtones, according to the document.

Rounding out the category, revenue from live performances, merch, licensing (sync and more), and others hit ¥50.86 billion/$336.01 million, up approximately 51.62% YoY. By revenue, bestselling projects on the quarter were Travis Scott’s Utopia, SZA’s SOS, Harry Styles’ perennially ranked Harry’s House, Luke Combs’ Gettin’ Old, and Miley Cyrus’ Endless Summer Vacation, respectively.

Sony Music Earnings Q3 2023 – Music Publishing and FY 2023 Forecast

Shifting to Sony Music Publishing, revenue during Q3 2023 reached ¥82.73 billion ($546.57 million), according to the resource, up about 12.57% YoY. In the category, streaming revenue accounted for ¥48.43 billion ($319.96 million), a YoY increase of 14.79% and a quarterly boost of 16.41%, the analysis shows.

The overarching music segment’s Q3 2023 operating income, including visual media and platform, was ¥81 billion ($535.14 million), Sony indicated, against adjusted OIBDA of ¥97 billion ($640.85 million). However, visual media and platform’s contribution “was approximately 20% of the operating income of the segment,” per the breakdown.

Looking forward to the remainder of the 2023 fiscal year – wrapping on March 31st, 2024, that is – Sony upped its sales forecast by ¥70 billion ($462.50 million) to ¥1.56 trillion ($10.31 billion), besides elevating anticipated operating income by ¥15 billion ($99.11 million) to ¥295 billion ($1.95 billion).