Friday, March 31, 2023

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The “little golden rooster” allows Sony to create a new high in revenue! With rampant piracy and the rise of streaming, why is the music business still growing?

Sony Music Group (Sony Music Group, referred to as Sony Music), a subsidiary of Sony Group founded more than 90 years ago, has grown silently in recent years. It is the business with the highest operating profit of Sony Group in the first half of the year, surpassing games and financial businesses. In the latest financial report in November (the second quarter of the fiscal year 2022), Sony Group’s operating profit from July to September hit a record high in the same period of the year. The biggest driving force is the music business, and its operating profit increased by about 55% compared with the same period last year.

Sony Music Group (Sony Music Group, referred to as Sony Music), a subsidiary of Sony Group and founded more than 90 years ago, has grown silently in recent years. It is the business with the highest operating profit of Sony Group in the first half of the year, surpassing games and financial businesses. In the latest financial report in November (the second quarter of fiscal year 2022), Sony Group’s operating profit from July to September hit a record high in the same period of the year. The biggest driving force is the music business, and its operating profit increased by about 55% compared with the same period last year.

The game business performed strongly during the epidemic, and its sales were much larger than that of the music business. However, the operating profit fell by 49% compared with the same period last year. Can listen while doing other things. However, the record industry still faces the challenge of rampant online piracy and the replacement of physical albums by streaming platforms. Why can Sony Music maintain steady growth?

Artists also need to look at data to optimize marketing and product strategies

Data is Sony Music’s weapon against the odds. “We understood the importance of data from the very beginning.” Dennis Kooker, president of Sony Music’s global digital business and US sales, told Forbes that when the business model of the music industry shifts from copyright revenue to Streaming platform profit sharing, it “represents the business from a one-time purchase to a large number of frequent trivial transactions.”

Extensive transaction data allows Sony Music to understand who the audience is, which songs to skip, what devices to listen to, and more. Compared with the past, the record industry could only blindly guess hits before the release of CDs. Now, based on the streaming platform data, it is possible to observe listeners’ preferences after release, adjust marketing strategies, and find out which tracks are worthy of promotion.

Sony Music also ushered in a new era of data transparency for its artists. Develop an exclusive portal website for artists to view information such as music and album downloads, tags, shares, etc., and understand the listening status of different streaming platforms or devices, so as to let artists understand the audience, market trends, and business opportunities as much as possible, and help them in their careers. Make better career and creative decisions.

These data can also be used when organizing physical concerts. For example, the tour manager analyzes the listening peak area, grasps the approximate number of fans, and then decides whether to arrange additional performances.

Actively acquire and expand IP, becoming the record company with the most copyrighted songs

In recent years, Sony Music has actively acquired music publishers such as Som Livre and AWAL to expand the number of copyrighted works. As of March, Sony Music has the copyright of more than 5 million songs worldwide, an increase of more than 1 million from three years ago (2019), and its holdings rank first among the world’s three major record companies.

According to Digital Music News, in the first half of the year, Sony Music had an average of 48 songs per week among the top 100 Spotify global music charts, compared with an average of 36 songs in the previous fiscal year.

Link multiple platform resources to create the largest sound volume

Sony’s financial report mentioned that it will strengthen its multi-channel strategy and expand its audience touch points as much as possible, including mobile games, TV animation, radio, movies, films, and live events.

Sony Music Japan’s subsidiary “Sony Music Entertainment Japan” (SMEJ) is particularly good at linking multiple platform resources to create momentum for itself, including using its novel and illustration website monogatary.com to contribute, launching a duo music group that “turns novels into music” as a selling point YOASOBI. The show “The First Take”, in which Canadian singer Avril Lavigne and Taiwanese singer Wei Lian were invited to participate this year, is also a YouTube channel opened by SMEJ. The production unit invites well-known singers from all over the world to sing to the end, creating new topics in the community from time to time.

SMEJ’s executive director in charge of the record business, Tsujino Gaku, told Nikkei last year that Sony is looking forward to developing a mechanism for consistently releasing hits and promoting them horizontally within the group, like Disney.

Not only care about revenue but also care about the diversity of the team

Unlike other businesses, Sony Music has a relatively young and diverse staff, with millennials and Generation Z accounting for 64%. The music industry, which is highly sensitive to fashion trends, has a great boost in organizational culture.

Sony Music released its first Global Impact Report in August (Sony Music Group Global Impact Report). Sony Music (excluding Japan) has more than 6,000 employees, and women account for 52.2%, far exceeding the Sony Group’s global female employee ratio (35%).

Sony Music CEO Rob Stringer (Rob Stringer) emphasized that “we are not only responsible for the music industry, but also responsible for the change, culture, and the history that defines human nature.” In terms of business performance, actively creating a diverse and inclusive organizational culture has made Sony Music is getting more and more attention inside and outside the group.

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