MBW’s Stat Of The Week is a series in which we highlight a single data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
Sony Music enjoyed a spectacular night at the Grammys in Los Angeles earlier this month, as an array of its blockbuster recording artists, including Beyoncé, Harry Styles, and Adele claimed the night’s most glittering prizes.
In the same week, over in Tokyo, Sony Group Corporation – the parent company to Sony’s music operation – announced its latest quarterly results, in Yen, for the three months ending December 31, 2022 (Sony’s fiscal Q3, but calendar Q4).
By crunching the numbers on these quarterly results, MBW has been able to establish their value in US dollars, as well as working out how Sony’s music division performed across 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 worth noting that, during 2022, due to the strength of the dollar vs. many international currencies, this methodology is actually likely to skew against Sony, i.e. down-weighting its true global revenue performance – which is fairly remarkable when you consider the numbers below.]
[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. According to MBW’s calculations based on Sony Corp’s announcements, Sony’s combined recorded music and music publishing operations generated USD $8.38 billion in the calendar year of 2022.
That USD $8.38 billion figure was up by $889 million on calendar 2021, or +11.9% year-on-year.
Breaking down the numbers
Unsurprisingly, Sony’s global recorded music operation generated the majority of its overall music revenues in 2022.
Those recorded music revenues on a USD-converted basis stood at $6.37 billion in the calendar 2022 year, up by $607 million – or +10.5% – year-on-year.
Within that calendar-year recorded music figure, streaming contributed USD $4.33 billion, a figure which was up by $396 million – or +10.0% – year-on-year.
Recorded music physical 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.
Perhaps the most historic revenue milestone breakthrough at Sony in calendar 2022 was its global publishing operation, which surpassed $2 billion in annual revenue (USD $2.008bn).
Where these figures become extra interesting? When we use them to ascertain how Sony’s success in calendar 2022 extended the financial gap between it and the third biggest music company in the world, Warner Music Group.
Sony vs. Warner: How 2022 saw the gap widen
Universal Music Group (the world’s largest music rights company) will announce its calendar Q4 2022 results next month, meaning we don’t yet have the numbers to make any comparison to Sony Music Group‘s annual performance in the 2022 calendar year.
Warner Music Group, though – the world’s third largest music company, behind Universal and Sony Music Group – announced its calendar Q4 (fiscal Q1) results earlier this month, on February 9.
This fact enables us to compare Sony’s music results in calendar year 2022 (again, including recorded music and affiliated revenues, plus music publishing, but not including ‘Visual Media & Platform’) with Warner Music Group’s equivalent results.
(Handily, our global USD-aggregated results from Sony form a like-for-like comparison with WMG’s reported quarterly figures, as New York-headquartered WMG reports to its NASDAQ investors in the ‘root’ currency of USD.)
The main takeaway from this comparison? Sony Music Group – boosted by its acquisition of AWAL and its majority-acquisition of Alamo Records in 2021 – significantly stretched the gap between itself and Warner Music Group in terms of annual revenue last year.
MBW has previously pointed out that this gap may be a big strategic thinking point for Robert Kyncl, the new CEO of WMG.
Warner is multiple times larger than the world’s fourth biggest music rights company, Korea-headquartered HYBE – which generated USD $1.37 billion in calendar 2022, vs. WMG’s $5.80 billion in overall revenue in the same period.
Yet as we demonstrate below, Warner is itself, in turn, now materially smaller than Sony’s global music rights operation, to the tune of $2.5 billion per year.
Sony vs. Warner: Recorded music
As you can see in the chart above, according to MBW’s calculations, Sony’s global recorded music operation (including merch and affiliated revenues, but not ‘Visual Media & Platform’) generated USD $6.37 billion last year.
That represented a gulf of $1.55 billion on Warner’s equivalent recorded music turnover in the same calendar 12 months ($4.82 billion).
In the prior calendar year (2021) – as reported – Sony was approximately $997 million ahead of WMG in annual recorded music turnover, suggesting this annual recorded music revenue gap grew by over $500 million in the 2022 calendar year.
[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
In terms of music publishing, Sony’s worldwide operation (including Sony’s separate Japanese publishing company, plus its primary global music publishing firm, Sony Music Publishing) generated USD $2.01 billion in calendar 2022.
That figure was $1.03 billion larger than the equivalent music publishing turnover from Warner (Warner Chappell Music) in the same calendar 12 months (see above).
In the prior calendar year (2021) Sony was approximately $915 million ahead of WMG in annual music publishing turnover ($815m vs. $1.73bn).
In other words, the gap between these two companies’ revenues didn’t grow too dramatically in calendar 2022, considering the ‘starting scale’ of each business at the top of the year.
Result: Sony’s music publishing company widened its annual revenue lead on Warner Chappell by around $120 million in 2022.
(Worth saying: As a standalone entity, Sony’s global music publishing operation is the world’s No.1 in terms of annual revenues, with Universal Music Publishing Group at No.2, and Warner Chappell Music at No.3.)
Warner vs. Sony: Recorded music + Publishing = a $2.5 billion difference
We can best sum up the revenue gap between music’s second and third biggest music rights companies in calendar 2022 when we combine their annual global recorded music revenues (including merch and other affiliated revenues) plus their annual music publishing results.
As you can see in the two charts above, doing so informs us that Sony’s global music rights operation (not including ‘Visual Media & Platform’) generated revenues in excess of $2.58 billion vs. Warner’s equivalent turnover (see: the bar in green above).
The overall (recorded music + music publishing) turnover of each company in the year, if you were wondering? Warner with USD $5.80 billion, Sony with $8.38 billion.
That $2.5 billion gap between the two companies’ annual recorded-music-plus-music-publishing revenue was up by around $600 million on the equivalent delta from 2021 ($1.91 billion).
Sony’s recorded music operation will have been boosted in 2022 by its first full year with AWAL in its fold, as well as some significant success at the ‘chart’ end of the global market via acts like Bad Bunny, Harry Styles, and Beyoncé.
Other additional frontline successes at the company included Todd Moscowitz’s Alamo Records (in which Sony bought a majority stake for around $200 million in 2021).
For Sony Music Group and its leader Rob Stringer, this all throws up a big question: Can Sony keep up this kind of growth momentum in a global music landscape where experts predict subscription streaming growth will significantly plateau in major markets in 2023?
For Warner Music Group and its new leader, Robert Kyncl, it throws up an altogether different question: What can the company do to start closing the revenue gap on Sony – and is doing so an even essential part of WMG’s strategy going forward?
Cinq Music Group’s repertoire has won Grammy awards, dozens of Gold and Platinum RIAA certifications, and numerous No.1 chart positions on a variety of Billboard charts. Its repertoire includes heavyweights such as Bad Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and hundreds more.Music Business Worldwide