As reported by Music Business Worldwide earlier today (August 7), Sony’s global music rights operation experienced double-digit growth in calendar Q2 (fiscal Q1), with revenues rising 11.4% year-over-year (YoY). However, a closer look reveals a slower growth rate in Sony’s recorded music streaming revenue, which increased by just 5.0% YoY when adjusted for US dollars.
This growth rate marks a notable deceleration compared to previous quarters. For instance, Sony’s recorded music streaming revenues had surged by 10.6% YoY in Q1 2024, 12.3% YoY in Q4 2023, and 9.5% YoY in Q3 2023. The slowdown is particularly striking given Universal Music Group’s (UMG) Q2 2024 results, which were released last month. UMG’s overall recorded music streaming revenues grew by 4.1% YoY, reflecting a similar trend of reduced growth.
UMG’s results showed a 6.9% YoY increase in subscription streaming revenues, while ad-funded streaming revenues declined by 3.9% YoY. In contrast, Sony does not separately report subscription and ad-funded streaming revenues, only providing a blended figure.
Naomi Matsuoka, Sony Corporation’s Senior Vice President, attributed the slower growth to factors similar to those impacting Universal Music Group. She noted that the impact of recent price increases for streaming services had been fully realized in the previous year’s figures, resulting in less of a boost to current YoY growth.
Matsuoka also acknowledged a slight decline in ad-funded streaming revenues, which contributed to the overall slowdown. Despite this, she emphasized that Sony’s streaming revenue growth, when adjusted for constant currency, was closer to 6% YoY, slightly higher than the reported 5.0% increase in dollar terms.
“Earlier, we stated that recorded music streaming revenues grew by 5% in dollar terms for calendar Q2. However, when adjusted for constant currency, the growth rate is actually in the 6% range according to our calculations. Thus, overall streaming growth aligns with our projections,” Matsuoka said.
For context, Sony calculates constant currency figures by converting reported financials from Yen to US dollars using the prevailing quarterly exchange rates. Matsuoka explained that a more precise constant currency figure—6%—is derived from a detailed formula considering foreign exchange rates across multiple regions.
Sadahiko Hayakawa, Sony Corporation’s head of finance and investor relations, added that the global music rights market is projected to continue growing at a mid-to-high single-digit annual rate, driven by increased average revenue per user (ARPU) and growth in emerging markets.
Notably, Sony’s music publishing division reported a strong performance with streaming revenues up 19.6% YoY in calendar Q2. Combined, Sony’s recorded music and music publishing streaming revenues reached $1.63 billion in the quarter, marking a 7.95% YoY increase.