Life is Good at Sony Music — Annual Sales Up 17% Thanks to Paid Streaming

Sony Music financials
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Sony Music financials
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Photo Credit: Sony Corp.

Sony Music is living the good life in Q1 2024, with annual sales up 17% thanks largely to paid streaming, and led by SZA’s ‘SOS,’ Travis Scott’s ‘Utopia,’ and Beyonce’s ‘Cowboy Carter.’

Sony Music Entertainment reported revenue growth of 16.9% in the fiscal year ended on March 31, to 1.59 trillion yen ($11.05 billion), according to the company’s financials posted on Tuesday, May 14.

Led by growth in paid subscription streaming services, Sony also attributes its healthy financials to the success of albums like SZA’s SOS, Travis Scott’s Utopia, and Beyonce’s Cowboy Carter. Other top releases included those from Bad Bunny, Harry Styles, Miley Cyrus, Luke Combs, Peso Pluma, and Doja Cat.

The numbers exceeded the guidance of 1.56 to 1.57 trillion yen in Sony’s previous quarterly earnings posted in February. Adjusted operating income before depreciation and amortization (AOIBDA) of 368.7 billion yen ($2.55 billion) also topped projections of 350-360 billion yen.

Notably, the yen-dominated revenue figures were boosted by foreign exchange rates — of Sony Music’s revenue gain, around 32% came from foreign exchange, totaling 76.5 billion yen ($529 million).

Recorded music and music publishing both enjoyed higher revenue from streaming services and paid subscriptions. Spotify’s price increase in July last year, coupled with continued subscriber growth on all platforms, provided a boost to earnings by Sony Music, as well as Universal and Warner Music.

Recorded music revenue of 1.07 trillion yen ($7.39 billion) was up by 20.4% from the previous year. Physical revenue dropped 7.4% to 101.3 billion yen ($701.7 million), but streaming soared by 18.5% to 709.5 billion yen ($4.91 billion), accounting for 66.5% of recorded music revenue. That’s down from 67.7% in 2022.

Music publishing’s yearly revenue rose by 18.1% to 326.7 billion yen ($2.26 billion). Streaming revenue increased by 21.1% to 185 billion yen ($1.28 billion), accounting for 56.6% of publishing revenue, up from 55.2% in 2022.

For the second quarter, Sony Music’s operating income was the largest of any Sony Corp. business, accounting for around a quarter of the parent company’s total operating income.

Sony management revealed the company’s “mid-range plan” including a partial spin-off of its financial services division to come in October 2025. The company will increase its focus on growth in music, film, games, and network services, in addition to its imaging and sensing solutions business.

Sony Corp. is aiming for an annual growth rate of 10% or more in these sectors, while Sony Music expects a 4% increase in revenue and operating income in the fiscal year ending March 31, 2025.