Alongside the big news that Sony Corp has reached an acquisition agreement that ups its EMI Music Publishing stake to 90%, the company has also set out its financial ambitions for music up to 2021.
Following the appointment of chief executive Kenichiro Yoshida earlier this year, Sony has issued a mid-term corporate strategy for the next three years in order to “transition management of Sony’s operations to a more long-term perspective”.
Sony’s music segment strategy essentially amounts to investing in signing and developing artists at Sony Music and songwriters at Music Week Awards winners Sony/ATV in order to capitalise on the booming streaming market, as Yoshida explained in the EMI Publishing acquisition statement.
“In order to maximise the business opportunities from the continuing growth of the streaming market, Sony will seek to reinforce the quality and quantity of its content IP catalogue, while also discovering and nurturing new artists to generate new IP,” said the financial statement.
The Japanese giant’s focus on the business philosophy of Kando (meaning “emotional involvement”) also underlines its commitment to music. “Sony will aim to create social value by giving people a sense of enrichment through the creation of a Community of Interest,” the company explained in its latest strategy document.
While Sony clearly anticipates the streaming-led growth for the music industry to continue, its operating income forecast is flat for the next few years. Last month Sony Corp’s music segment (including publishing and visual media) reported revenues of 800bn yen (£5.36bn) for 2017 and operating income up 52% to 127.79bn yen (£856m).
Its forecast for 2018 is down to 750bn yen (£5.03bn), a drop of 6.25%, partly due to prior year gains in property transactions. Operating income for music is set to dip to 112m yen (£750m).
Sony has now issued a 2021 operating income forecast for the music segment of between 110m yen and 130m yen (£737-871m).
Subscribers can read Music Week's recent interview with Dennis Kooker, president, global digital business and US sales, Sony Music Entertainment, on how the major is targeting growth in the streaming market.