Sony’s Money-Losing Music Bet: Sales Down 11 Percent, Losses Increase
by Peter Kafka
Posted on October 29, 2008 at 4:38 AM PT
Did you buy the “Only by the Night,” the newish album from Kings of Leon? If so, Sony would like to thank you.
Everyone else, though, is going to have to pick up the pace or Sony’s new investment in its music business isn’t going to pay out.
Footnoted in Sony’s Q2 earnings release today are the details on the performance of Sony BMG, the music label it used to own in conjunction with Bertelsmann AG.
This summer Sony (SNE) bought out its partner for $900 million and now owns the label outright.
But the newest results make it hard to understand why it made the investment: Sales dropped 11 percent, to $762 million, and the company lost $57 million, up from an $8 million loss a year ago.
Those results aren’t out of the ordinary for the label, which has been struggling along with the rest of the industry for many years.
The now-boilerplate language to describe the results blamed the “continued decline in the worldwide physical music market not being offset by growth in digital product sales.”
Okay. So what about the Kings of Leon? MediaMemo confesses that it has yet to hear the new album, but Sony says it one of the best performers of the quarter.
Other winners: AC/DC’s “No Bull,” which MediaMemo believes is actually a concert DVD, and “One Chance” by Potts, which I’ll confess I’ve never heard of, period.
Comments
That would be “One Chance” by Paul Potts, the opera singer who came out of the “Britain’s Got Talent” TV show. He didn’t take off in the States like he did in other parts of the world.
Sony BMG did lose money in Q2, but the divorce is way too recent to proclaim it a money-losing bet. Wait a couple years and see how it goes.
Posted by Glenn Peoples at October 29th, 2008 at 7:01 amYou should listen to the Kings of Leon album.
How much trouble is Sony Music in? Judging by their recent numbers: HUGE trouble. But listen to their CEO in the UK and you’ll get the feeling they are the only company who gets the new realities in the business, I agree with Glenn; time will tell.
Posted by Christian Hoeferle at October 29th, 2008 at 9:51 amhttp://hoeferle.wordpress.com/
I don’t see Sony as really doing any worse than any other major label at this time…
They’re all struggling.
Posted by Universal Indie Records at October 29th, 2008 at 11:34 amI knew you’d help me out, Glenn, thanks. But both you and Christian way more optimistic than I am: Unless Sir Howard says they’re just going to go into the catalog business, I worry that they’ll be bleeding red ink for a long time.
Posted by Peter Kafka at October 29th, 2008 at 11:45 am