Tuesday, February 9, 2021

Sony's music division weathers the Covid crisis while Film & TV sees a significant drop in revenues 

 

By Emmanuel Legrand

Sony’s film/TV and music divisions experienced different outcomes during 2020. Sony Music Entertainment's worldwide recorded music revenues reached $4.51 billion in 2020, up 8.1% compared to 2019's figures, while global music publishing revenues, combining Sony/ATV Music Publishing and Sony Music Publishing Japan, were up 17.1% to $430.6m.

  Recorded music's streaming revenues were up 19.5% in 2020 over 2019, at $2.87bn. Sony Music ended up the year on a high with Q4 2020 revenues of $1.36bn, up 17.5% year-on-year. Interestingly, Sony Music's physical revenues also rose to to $898m in 2020 from $803m, thanks mostly from a 41% year-on-year rise during the fourth quarter to $336m.  

  Meanwhile, Sony's film and TV division saw a 16% drop in sector revenues to $1.83bn. A decline in theatrical revenues was partly offset by growth in catalogue licensing revenues. In a call with analysts, Hiroki Totoki, Sony's Executive Deputy President and Chief Financial Officer, said revenues at the division were down primarily due to a significant decrease in theatrical releases, but the company also managed to keep costs under control by a significant decrease in marketing costs. 

Lack of new releases

  "Due to the global resurgence of Covid-19, our film releases have been delayed because theaters have been closed, and we have decided to postpone again the theatrical release of films like 'Ghost Busters: Afterlife', 'Cinderella' and 'Morbius'," said Hiroki Totoki.

  He added: "Next fiscal year, we expect Motion Pictures to be negatively impacted primarily by a decrease in home entertainment and television licensing revenue, mainly due to the lack of major film releases in the current fiscal year. On the other hand, in television productions, we expect profitability next fiscal year to improve primarily due to licensing of library product, reflecting strong demand from video streaming and other services."

  In the TV distribution field, 2020 was marked by the acquisition of anime service Crunchyroll, which as over 90 million users worldwide and three million paying subscribers. "Consumer interest in Japanese anime is increasing rapidly, particularly outside of Japan," said Hiroki Totoki of the acquisition. "And as a company that currently owns both content and DTC streaming service, we have positioned anime as a focus area. Through the planned acquisition, we aim to broadly distribute premium Japanese anime content produced by Aniplex and other studios to fans all over the world."

Expand services to artists

  He also reflected on the acquisition of AWAL, the distribution and service company for independent labels and artists, from Kobalt for $430m. "Through the planned acquisition of AWAL, we aim to expand our artists services business in the independent space, which is driving growth in the music market. And we aim to expand the foundation of our business in the Music segment by enhancing the discovery and development of new artists," he said, noting that Sony Music's The Orchard, which caters for the indie sector, and AWAL will have a "complementary relationship."

  Another segment posting growth was the games division with the release of the PlayStation5 console during Q3, generating sales of 4.5 million units. 


Warner Music Group posted revenues up 6.3% (or up 3.8% in constant currency) during the last quarter of 2020, to $1.33 billion. WMG's Recorded Music division had revenues up 7% to $1.12bn during the quarter while its Music Publishing division had flat revenues at $175m. Operating income was $196 million compared to $165 million in the prior-year quarter.

  "Robust digital revenue growth across Recorded Music and Music Publishing was partially offset by a decline in Recorded Music physical and artist services and expanded-rights revenue and in Music Publishing performance, mechanical and synchronisation revenue, which reflects the impact from Covid," said the company in a filing.

  Recorded Music's streaming revenue were up 17.5% over the same period the prior year at $727m. Music Publishing experienced a 35.6% rise in digital revenues to $99m, but performance rights were down 34.7% to $30m, while mechanical and synch also saw a drop in revenues.

  "Despite the impact of Covid, we generated the highest quarterly revenue in our 17-year history as a standalone company, growing 4% compared to the prior-year period, which was unaffected by Covid," said WMG CEO Steve Cooper.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.