Sony Music’s Quarterly Revenue Hit $2.6 Billion on Streaming and Publishing Gains

Harry Styles, Mariah Carey and big streaming gains helped Sony Music Entertainment finish 2022 with a bang. Styles’ album Harry’s House and Carey’s typically strong holiday performance drove SME’s revenues up 22.9% to 363.7 billion yen ($2.57 billion at quarter’s average exchange rate) in its fiscal third quarter ended Dec. 31, 2022.

Styles’ 2022 release Harry’s House and 2019 album Fine Lines were among SME’s top performing titles of the quarter. Carey’s “All I Want for Christmas is You” topped the U.S. Hot 100 chart for four weeks (chart dates of Dec. 17, Dec. 24, Dec. 31 and Jan. 7). The company also pointed to strong sales and streams by Steve Lacy’s Gemini Rights, SZA’s SOS, Future’s I Never Liked You, Chris Brown’s Indigo, Beyonce’s Renaissance and Bruce Springsteen’s Only the Strong Survive.

Quarterly operating income improved 14.3% to 63 billion yen ($445 million). Adjusted earnings before interest, taxes, depreciation and amortization were 80 billion yen ($565 million).

The recorded music division’s revenues improved 30.1% to 239 billion yen ($1.69 billion). Streaming revenue grew 33.2% to 159.1 billion yen ($1.12 billion) and accounted for 66.6% of recorded music revenue, up from 65% in the prior-year period. Download revenue, up 14.3%, accounted for just 4.7% of digital revenues compared to 5.5% a year earlier. Physical sales declined 6% to 31.1 billion yen ($219.1 million) and accounted for 13% of total recorded music revenue, down from 18%.

Publishing revenues increased 42.9% to 74.2 billion yen ($523.4 million) in the quarter. Within publishing, streaming revenue improved 59.8% to 41.6 billion yen ($293.3 million). Streaming’s share of publishing revenue grew to 56% from 50.1% in the prior-year period. Other publishing income rose 25.9% to 32.6 billion yen ($230.1 million).

Excluding foreign exchange and the visual media and platform segment, SME’s recorded music and publishing divisions grew 10% in the quarter. That is a smaller improvement because changes in foreign exchange rates helped SME’s yen-denominated results. From the end of 2021 to 2022, the value of the yen declined against the three main foreign currencies: -10% against the U.S. dollar, -6.9% against the euro and -1.8% against the pound.

The visual media and platform segment was a drag on earnings due to lower anime sales, however. The segment’s revenue fell 16.3% to 47.4 billion yen ($334.7 million).

Looking ahead, the company maintained its forecast for full-year revenue at 1.37 billion yen (approximately $9.7 billion) at operating income at 265 billion yen (approximately $1.87 billion).