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SONY Q3: THE VIEW FROM TOKYO

Sony has come up with a reason why music sales took a dip in the company’s third quarter: No new Adele album.

In explaining the company’s third-quarter results, Sony Corp. CFO Kenichiro Yoshida said Sony Music’s sales—which include recorded music, publishing and visual media— decreased 1.8% from 2015 (a 4% increase on a constant currency basis) to $1.63b. Part of that owed to appreciation of the yen against the dollar and lower recorded-music sales.

He singled out Pentatonix’s A Pentatonix Christmas, Leonard Cohen’s You Want it Darker and Nogizaka46’s Sayonara no Imi as the unit’s hits in the quarter, which ended 12/31, but noted the same quarter of the previous fiscal year benefited from Adele’s 25.

In the quarter, physical products represented 45% of sales, streaming is 40.5% and downloads, which continue to drop at a considerable rate, are just under 15%.

Operating income increased to $241m in the music unit while operating profit was up 2.6%.

Music, though, was hardly Sony’s key concern, as operating income fell by more than 10% to $241m. Film studio Sony Pictures saw a nearly 20% drop in sales to $1.8b, a $920m operating loss, and operating income was down a devilish 66.6% to $58m.

In a related story, Sony will not be selling off its film division because it is so precious.

Besides film underperforming at the box office, the decline was attributed to lower home entertainment revenues and higher marketing expenses.

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