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SONY'S SOLID SUMMER: A Q2 TO REMEMBER

Record revenue from streaming at Sony Music last summer was so robust that the company has adjusted its guidance upward for fiscal 2020 to around $8b. And it’s not just income that’s rising; Sony Music’s profits were up a whopping 41% in the quarter as well.

Guidance for the division, which includes the Visual Media & Platform gaming unit in Japan, sits nearly 8% higher than the previous projection, while the forecast for annual operating profit is up 17% to nearly $1.4b.

Sony’s Recorded Music operation pulled in $1.16b in the quarter, up 11.2% over fiscal Q2 2019, with the period that ended 9/30 its best three-month-reporting span on record. Streaming brought in $742.3m, up 19% over 2019, and physical sales were up 31% to $248m, owing partially to big sellers in Japan. Recorded Music’s operating income hit $498m in the quarter, pushing the operating margin to 23%.

On a conference call, CFO Hiroki Totoki said advertising-supported streaming, which was negatively impacted by COVID-19, is recovering. “Primarily because streaming revenue in Recorded Music is exceeding our expectations, fiscal year '20 sales are expected to increase ¥60 billion [$575m] compared to our previous forecast to ¥850 billion, and operating income is expected to increase ¥22 billion to ¥152 billion [$1.46b]," he noted.

Music-publishing revenue was flat from last year at $353.7m despite a pandemic-related reduction in licensing, syncs and live performances.

Big sellers included music from Harry Styles, Travis Scott, Doja Cat, Luke Combs and Bob Dylan.

Sony said the projection shift is “due to an expected increase in streaming revenues in Recorded Music in addition to the expected strong performance of game applications for mobile devices and an expected increase in anime business sales in Visual Media & Platform.”

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