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STREAMING PROVIDES BRIGHT SPOT FOR SONY MUSIC

Sony Music’s revenue from streaming rose nearly 6% to $640.3m in the first quarter of the company’s fiscal year. Effects of COVID-19 were felt across all of the company’s divisions.

In releasing the results for the quarter that ended 6/30, Sony noted that new music was being delayed “primarily due to some artists being unable to record songs and music videos.” The impact on profitability was negligible in countries where the proportion of music that is streamed is high.

“However, in countries like Japan where the proportion of music that is streamed is relatively low, CDs and other packaged media sales are decreasing due to restrictions on going outside,” the company reported. “Ticket and merchandising revenues are also decreasing, as concerts and other events are being postponed and cancelled in Japan and other areas. Due to a global reduction in advertising spending, revenue from advertising-supported streaming services and revenue from the licensing of music in TV commercials is decreasing. Additionally, delays in the production of motion pictures and TV shows are causing a decline in music licensing revenue.”

Top performers in the quarter were Harry Styles, Future, Doja Cat, Travis Scott, Polo G and Luke Combs.

Recorded music was down 10.5% from 2019 to $911.6m and the overall music division, which includes publishing and Visual Media & Platform, reached $1.61b, a decline of 11.5%. Operating income was $325m. 

The company expects the impact of COVID-19 will continue to adversely affect results through the rest of the fiscal year, which ends 3/31/21. Revenue and operating income in the division will see “decrease in sales of physical media… postponement and cancellation of live events in Visual Media and Platform and … a decrease in music licensing revenues in Music Publishing.” 

Sony Corp. saw a 53% increase in net income in the quarter, reaching $2.19b with the Games & Network Services division leading the way due to lockdowns and stay-at-home orders. Revenues were up more than 30% to $5.66b.

“Hardware, software and network services all benefited in the quarter for stay-at-home demand,” Executive Deputy President and CFO Horoki Totoki said on a conference call with financial analysts.

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