MBW’s Stat Of The Week is a collection through which we spotlight a single information level that deserves the eye of the worldwide music business. Stat Of the Week is supported by Cinq Music Group, a technology-driven file label, distribution, and rights administration firm.
Sony Music loved a spectacular night time on the Grammys in Los Angeles earlier this month, as an array of its blockbuster recording artists, together with Beyoncé, Harry Kinds, and Adele claimed the night time’s most glittering prizes.
In the identical week, over in Tokyo, Sony Group Company – the guardian firm to Sony’s music operation – introduced its latest quarterly results, in Yen, for the three months ending December 31, 2022 (Sony’s fiscal Q3, however calendar This autumn).
By crunching the numbers on these quarterly outcomes, MBW has been in a position to set up their worth in US {dollars}, in addition to understanding how Sony’s music division carried out throughout the course of calendar 2022.
[Long story short on our methodology: We use a Yen-USD conversion rate for Sony’s global revenues in each calendar quarter at the prevailing rate for each period as provided by Sony Corp. It’s price noting that, throughout 2022, as a result of power of the greenback vs. many worldwide currencies, this technique is definitely more likely to skew towards Sony, i.e. down-weighting its true international income efficiency – which is pretty outstanding when you think about the numbers beneath.]
[Last bit of arithmetical housekeeping before we get into the good stuff: Corporately speaking, Sony Group’s global music operation includes recorded music, plus music publishing, plus ‘Visual Media & Platform’ (VM&P). VM&P primarily covers mobile games and animation projects, and has been omitted from all revenue calculations in this analysis.]
So. In line with MBW’s calculations based mostly on Sony Corp’s bulletins, Sony’s mixed recorded music and music publishing operations generated USD $8.38 billion within the calendar yr of 2022.
That USD $8.38 billion determine was up by $889 million on calendar 2021, or +11.9% year-on-year.
Breaking down the numbers
Unsurprisingly, Sony’s international recorded music operation generated the vast majority of its total music revenues in 2022.
These recorded music revenues on a USD-converted foundation stood at $6.37 billion within the calendar 2022 yr, up by $607 million – or +10.5% – year-on-year.
Inside that calendar-year recorded music determine, streaming contributed USD $4.33 billion, a determine which was up by $396 million – or +10.0% – year-on-year.
Recorded music bodily gross sales in calendar 2022 at Sony stood at $771.5 million, down on the $887.7 million Sony generated globally from CD and vinyl in 2021.
Maybe probably the most historic income milestone breakthrough at Sony in calendar 2022 was its international publishing operation, which surpassed $2 billion in annual income (USD $2.008bn).
The place these figures grow to be additional fascinating? Once we use them to determine how Sony’s success in calendar 2022 prolonged the monetary hole between it and the third greatest music firm on the earth, Warner Music Group.
Sony vs. Warner: How 2022 noticed the hole widen
Universal Music Group (the world’s largest music rights firm) will announce its calendar Q4 2022 results next month, that means we don’t but have the numbers to make any comparability to Sony Music Group‘s annual efficiency within the 2022 calendar yr.
Warner Music Group, although – the world’s third largest music firm, behind Common and Sony Music Group – introduced its calendar This autumn (fiscal Q1) outcomes earlier this month, on February 9.
This reality permits us to check Sony’s music ends in calendar yr 2022 (once more, together with recorded music and affiliated revenues, plus music publishing, however not together with ‘Visible Media & Platform’) with Warner Music Group’s equal outcomes.
(Handily, our international USD-aggregated outcomes from Sony kind a like-for-like comparability with WMG’s reported quarterly figures, as New York-headquartered WMG studies to its NASDAQ traders within the ‘root’ foreign money of USD.)
The principle takeaway from this comparability? Sony Music Group – boosted by its acquisition of AWAL and its majority-acquisition of Alamo Information in 2021 – considerably stretched the hole between itself and Warner Music Group when it comes to annual income final yr.
MBW has previously pointed out that this hole could also be a giant strategic pondering level for Robert Kyncl, the brand new CEO of WMG.
Warner is a number of instances bigger than the world’s fourth greatest music rights firm, Korea-headquartered HYBE – which generated USD $1.37 billion in calendar 2022, vs. WMG’s $5.80 billion in total income in the identical interval.
But as we exhibit beneath, Warner is itself, in flip, now materially smaller than Sony’s international music rights operation, to the tune of $2.5 billion per yr.
Sony vs. Warner: Recorded music
As you may see within the chart above, in keeping with MBW’s calculations, Sony’s international recorded music operation (together with merch and affiliated revenues, however not ‘Visible Media & Platform’) generated USD $6.37 billion final yr.
That represented a gulf of $1.55 billion on Warner’s equal recorded music turnover in the identical calendar 12 months ($4.82 billion).
Within the prior calendar yr (2021) – as reported – Sony was roughly $997 million forward of WMG in annual recorded music turnover, suggesting this annual recorded music income hole grew by over $500 million within the 2022 calendar yr.
[Boring but important explainer: In each of its quarterly SEC filings, WMG provides an alternative figure for prior-year revenue that reflects what that prior-year quarter’s turnover would have been had reverse-constant currency been applied. This is irrelevant in the comparative calculations in this article, as Sony’s USD-aggregated revenues for 2021 have been converted from Yen to USD at the prevailing quarterly rates in that prior-year. However, for the sake of completeness, had Warner’s prior-year USD constant currency figures been applied to the figures for 2021 in the graphs in this article, that calendar year’s recorded music revenues at WMG would have been reduced by $231 million, its publishing revenues would have been reduced by $35 million, and its overall revenues would have been reduced by $266 million.]
Sony vs. Warner: Publishing
By way of music publishing, Sony’s worldwide operation (together with Sony’s separate Japanese publishing firm, plus its major international music publishing agency, Sony Music Publishing) generated USD $2.01 billion in calendar 2022.
That determine was $1.03 billion bigger than the equal music publishing turnover from Warner (Warner Chappell Music) in the identical calendar 12 months (see above).
Within the prior calendar yr (2021) Sony was roughly $915 million forward of WMG in annual music publishing turnover ($815m vs. $1.73bn).
In different phrases, the hole between these two firms’ revenues didn’t develop too dramatically in calendar 2022, contemplating the ‘beginning scale’ of every enterprise on the prime of the yr.
Outcome: Sony’s music publishing firm widened its annual income lead on Warner Chappell by round $120 million in 2022.
(Price saying: As a standalone entity, Sony’s international music publishing operation is the world’s No.1 when it comes to annual revenues, with Common Music Publishing Group at No.2, and Warner Chappell Music at No.3.)
Warner vs. Sony: Recorded music + Publishing = a $2.5 billion distinction
We are able to finest sum up the income hole between music’s second and third greatest music rights firms in calendar 2022 once we mix their annual international recorded music revenues (together with merch and different affiliated revenues) plus their annual music publishing outcomes.
As you may see within the two charts above, doing so informs us that Sony’s international music rights operation (not together with ‘Visible Media & Platform’) generated revenues in extra of $2.58 billion vs. Warner’s equal turnover (see: the bar in inexperienced above).
The general (recorded music + music publishing) turnover of every firm within the yr, for those who had been questioning? Warner with USD $5.80 billion, Sony with $8.38 billion.
That $2.5 billion hole between the 2 firms’ annual recorded-music-plus-music-publishing income was up by round $600 million on the equal delta from 2021 ($1.91 billion).
Sony’s recorded music operation can have been boosted in 2022 by its first full yr with AWAL in its fold, in addition to some important success on the ‘chart’ finish of the worldwide market through acts like Dangerous Bunny, Harry Kinds, and Beyoncé.
Different further frontline successes on the firm included Todd Moscowitz’s Alamo Information (through which Sony bought a majority stake for round $200 million in 2021).
For Sony Music Group and its chief Rob Stringer, this all throws up a giant query: Can Sony sustain this type of development momentum in a world music panorama the place specialists predict subscription streaming development will considerably plateau in main markets in 2023?
For Warner Music Group and its new chief, Robert Kyncl, it throws up an altogether totally different query: What can the corporate do to start out closing the income hole on Sony – and is doing so a fair important a part of WMG’s technique going ahead?
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