Sony Music Revenues Jump 16% Thanks to SZA & Streaming

With SZA’s album SOS leading the way and the market enjoying more growth in streaming royalties, Sony Music’s revenue grew 16.0% to 422.1 billion yen ($2.85 billion at the period’s average exchange rate) in its fiscal third quarter ended Dec. 31, the company announced Wednesday (Feb. 14). 



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Other top releases for the quarter were Travis Scott’s Utopia, Rod Wave’s Nostalgia, Doja Cat’s Scarlet, Blink-182’s One More Time…, Tate McRae’s Think Later, Harry Styles’ Harry’s House and Fuerza Regida’s Pa Las Baby’s Y Belikeada. A couple holiday classics were amongst Sony’s top albums in the Christmas quarter: Mariah Carey’s Merry Christmas and Phil Spector’s A Christmas Gift for You From Phil Spector

Streaming fueled growth in both the recorded music and music publishing segments of the business. Paid subscriptions were a major factor in the first full quarter after Spotify raised prices in roughly 50 markets, including the U.S., in July. Favorable foreign exchange rates accounted for about 24% of the quarter’s 58.4 billion yen ($394.9 million) revenue increase. 

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Its double-digit revenue growth was comparable on a percentage basis to other music companies that have released earnings. In the same quarter, Warner Music Group’s revenue grew 17.5% to $1.75 billion and Reservoir Media revenue improved 19% to $35.5 million. Spotify, the largest single source for music royalties globally, grew revenue by 16% to 3.67 billion euros ($4.05 billion). 

Sony Music’s margins improved across the board, too. Operating income improved 20.8% to 76.1 billion yen ($514.4 million) and adjusted operating income before depreciation and amortization jumped 25.3% to 98.5 billion yen ($666.2 million). Adjusted OIBDA margin improved nearly two percentage points to 23.3% from 21.6% in the prior-year quarter. 

The strong quarter led Sony Music to raise its full-year forecasts for the third consecutive quarter. On Wednesday, the company raised the forecasts for both revenue and adjusted OIBDA by 10 billion yen ($68 million) — revenue from 1.56 trillion yen ($10.37 billion at the current exchange rate) to 1.57 trillion yen ($10.43 billion) and adjusted OIBDA from 350 billion yen ($2.33 billion) to 360 million yen ($2.39 billion). When the company released its fiscal second quarter earnings in November, it increased its revenue guidance by 5% to 70 billion yen ($485 million) and adjusted OIBDA by 4%, or 15 billion yen ($104 million). In August, it raised its revenue forecast by 6%. 

Both music divisions each posted solid year-over-year gains in the quarter. Recorded music revenues jumped 19.9% to 286.5 billion yen ($1.94 billion). Streaming revenue rose 17.2% to 186.5 billion yen ($1.26 billion) and accounted for about 58% of the segment’s improvement. Physical revenue gained just 1.5% to 31.5 billion yen ($213.2 million). The “other” category — including merchandise, live performances and licensing revenue from synch, public performance and broadcast — jumped 45.9% to 59.7 billion yen ($403.9 million).  

Music publishing revenue rose 16.1% to 86.1 billion yen ($582 million). Streaming revenue climbed 22.4% to 50.9 billion yen ($343.9 million) and accounted for 78% of the segment’s year-over-year gain. Publishing’s “other” category grew 8% to 35.2 billion yen ($238.1 million). 

Visual media and platform revenue declined 5.1% to 45 billion yen ($304.4 million). The segment includes mobile gaming, software for PCs and game consoles, and software development contracts. 

Financial metrics for Sony Music’s fiscal third quarter ended Dec. 31, 2023:

  • Revenue of 422.1 billion yen ($2.85 billion), up 16.0% year over year. 
  • Adjusted operating income of 98.5 billion yen ($666.2 million), up 25.3% year over year.
  • Recorded music of 286.5 billion yen ($1.94 million), up 19.9% year over year.
  • Music publishing revenue of 86.1 billion yen ($582 million), up 16.1% year over year.
  • Visual media and platform revenue of 45 billion yen ($304.4 million), down 5.1% year over year. 


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