Quick viewing(Text Mode)

Music Segment

Music Segment

Segment

Sony’s Music Segment Music Segment

Sony Music Sony Music (“SME”) Entertainment Japan (“SMEJ”) Publishing (“SMP”)

FY18 Outside Sales

SME Visual Media & Platform: 33% Recorded Music: 54% SMEJ: SME SME: SME:

SMEJ Music Publishing: 13% SMEJ SMEJ:

SMP

SMEJ Sony Corporation Music Segment Sony Music Entertainment

Executive Vice President Sony Corporation

Chief Executive Officer Sony Music Entertainment Rob Stringer

Recorded Music Market Music Segment Four Consecutive Years of Solid Revenue Growth; Expected to Continue ($B, includes Japan) CY18 vs CY17 +9.7% KEY METRICS +7.4% $19.1 +9.2% $17.4 –3.2% +3.7% $16.2 +33% $14.3 $14.8 PAID $9.0 SUBSCRIPTION Streaming 47% OF TOTAL MARKET Downloads / +22% Other Digital $2.3

Physical $4.7 -21% Public Performance/ DOWNLOADS Sync $3.1

CY14 CY15 CY16 CY17 CY18

Source: IFPI. Note: Digital Figures Include Digital Radio (SoundExchange) Sony Corporation Music Segment

Global 2018 Success Grammy Awards

Childish Gambino • Record of the Year • of the Year • Best Rap/ Sung Performance • Best IFPI 2018 Best Selling Global Single “Havana” 2.9Bn Streams LTD

Sony Corporation

Music Segment 2019 So Far…

Over 1.5Bn Streams 2019 YTD

5.8Bn Streams LTD Approaching 4M Equivalent Units Khalid Lil Nas X Globally 50M Monthly Listeners “” Travis Scott Now #1 Global 900M Streams Artist #1 Track of This Year

7 #1 On Billboard Album Chart Future, , Hozier, Khalid, BTS, P!nk,

Sony Corporation Source: Spotify, Nielsen Music Connect, SME Sales Reporting SME Financial Highlights Music Segment Strong Growth in Operating Income, Cash Flow and Margin

CAGR +25% Profit Record Margin Profit +6.5 pts Vs. FY16 Operating Income FY16 FY17 FY18* FY19 FCT

+ Additional $1BN Spotify Gain

* Excludes one- $1B Spotify gain Sony Corporation

Music Segment Successful Investment in

Continued Expansion of Global 24,000 600,000 Footprint & Service Capabilities Labels Artists 40+ Markets Worldwide

13 30,000 Million New Tracks Tracks per Week

OPERATING INCOME CAGR +26% SINCE FY15

NOTE: The Orchard Revenue Reported On A Net Fee Basis Sony Corporation Increased Investment in Talent Acquisition and Development Music Segment

Increased

Resources in Talent Discovery Increased Annual Creative Staff Headcount: Artist Signings* Signings: +75% vs. FY15 +93% vs. FY15

FY15 FY16 FY17 FY18 FY19 FCT FY15 FY16 FY17 FY18 FY19 FCT

Increased Increased Investment In Talent Roster Size* Annual Talent Roster Size: Investment: +45% vs. FY15 +46% vs. FY15

FY15 FY16 FY17 FY18 FY19 FCT FY15 FY16 FY17 FY18 FY19 FCT

* Number of Persons Sony Corporation

Expanding Repertoire Centers and Creative Resources Music Segment

New Leadership atat Relaunch LabelEstablishing Partnerships Joint Key Creative CentersCenters of andVenture Joint Labels Ventures

• New President and Keep Cool Visionary Co-Heads of A&R • Additional Major U.S. Label – 20 New Artists Signed

• Experienced Executive September Six Course CONTINENTAL EUROPE & AFRICA Team • Management & Publishing • Newly Structured Region Divisions • New Head of GSA SamePlate Palm Tree

Sony Corporation Driving Global Music Market Development Music Segment Working With Commercial Partners to Drive Paid Subscription Growth

Supporting Partner Sharing Market Collaborative New Leadership at Relaunch Label Partnerships Innovation Intelligence With DSPs Key Creative Centers of Arista and Joint Ventures

Genre Acquisition and Opportunities Untapped Conversion Demographics Campaigns Voice Activation

Accretive Bundles

Consumer Behavior Effectiveness New Business Models

Sony Corporation

Driving Global Music Market Development Music Segment Emerging and Growth Markets

Subscription Model Creating Opportunities In…

Latin Iberia China New Markets Build On #1 Expand Global Aggressive SME Leadership Position Footprint Growth Strategy In Latin Iberia Eastern Europe Russia #7 Global Headcount +13% +33% Market & Roster Market Streaming India Growth Growth Growth Y-o-Y* Y-o-Y* Joint Africa SE Asia 3 of Top 15 Venture with Global Markets

Sony Corporation * Annual Growth in CY2018 Sony Music’s Extensive Value Proposition to Artists Music Segment

Creative Marketing Relationships Global Data & Excellence Expertise and Access Reach Analytics

World-ClassWorld Class Global Global Workforce Workforce [employee photos in background] Core: Talent / Artists

Sony Corporation

Sony Music Value Proposition Music Segment Investing In Capabilities to Expand Our Value Proposition and Deepen Our Relationship with Artists

Premium New Podcasting Merchandising Content Production Brands Services

Creative Artist Management Artist-Led Studio Centers / Ticketing Hubs Ventures

Sony Corporation Enhancing Data & Analytics Capabilities Music Segment Continued Investment In People & Technology

Simple, Insightful Enhanced Internal Cutting Edge Tools and Capabilities Analytical Dashboards Techniques

Talent Discovery

Marketing Efficiency

Audience Development

Commercial Sales

Sony Corporation

Industry Leader in Artist Relations Music Segment Sony Leading Approach to…

NewFair Leadership at RelaunchTransparent LabelReal Partnerships Time CompensationKey Creative Centers Artistof Arista — Label Royaltyand Joint Ventures For Artists Relationship Accounting

Extremely Positive Introducing Real Time Reaction to SME Spotify Royalties & Cash Out Simple Flexible Equity Payments Artist Contracts

Best-In-Class Artist Sales and Royalty Portals

Sony Corporation & Sony Partnership Music Segment

CES Presentation In The Water Festival January 2019, Las Vegas April 2019, Virginia

Music Technology Sony HQ Visit Development November 2018 Tokyo Project Ongoing Sony Corporation

Sony Competitive Differentiation Music Segment

Sony Music Position as Part of the Sony Family of Companies Enabling Unique Commercial, Promotional, and Creative Opportunities Across Business Units

Sony Corporation Sony Music Operating Income: FY17 Act to FY18 Act Music Segment

(US Dollars)

1 Physical & Download

2 3 2 Streaming

1 3 Higher prior year one time expenses and current year savings offset by increased investment in talent, SG&A, and unfavorable FX

FY17 Act FY18 Act

Sony Corporation

Sony Music Operating Income: FY18 Act to FY19 Forecast Music Segment

(US Dollars)

2 3 1 Physical & Download

1 2 Streaming

3 Investment in talent, data analytics, emerging markets, and new business verticals

FY18 Act FY19 Forecast

Sony Corporation Music Segment Sony/ATV Music Publishing

Chairman & Chief Executive Officer Sony/ATV Music Publishing Jon Platt

Music Publishing Overview Sony/ATV Music Publishing

Diversified Sources of Revenue

Radio Physical & Digital Stations Downloads Streaming

Television Cable Film Video Live Networks Networks and Trailers Games and Stage

Sony Corporation Music Publishing Market Sony/ATV Music Publishing

Growth Trajectory

$ in billions

$5.5 $4.9 $4.2 $4.4 $4.0 $4.0 11% 11%

5% 4% 2% 2%

CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018CY CY 2021E 2021

Global Music Publishing Revenues Growth %

Source: Music & Copyright Sony Corporation

Importance of EMI Acquisition Sony/ATV Music Publishing

Exemplifies Sony Corp’s Content Strategy

High Margin

Diverse Revenue Stream

Recurring Revenue

Decade Spanning

Stable Cash Flow 2.1 Million Copyrights Genre Diversity

One Sony Projects

Sony Corporation Impact of EMI Acquisition Sony/ATV Music Publishing

Material Increase to Operating Income

FY 2017 FY 2018FY FY 2019 2019 FCT

39.8% Equity 100% Owned 100% Owned Interest November 2018 Full Year

Sony Corporation

Roster of the Most Talented Sony/ATV Music Publishing

Taylor Ed Carole Stevie Swift Sheeran King Wonder

Luis Fonsi Sara Pharrell Queen P!nk Gaga Bareilles

Sony Corporation Top Earning By Release Year Sony/ATV Music Publishing Older 1960s & 1970s & 1990s & Today 2010s &

Sony Corporation

#1 Publisher Sony/ATV Music Publishing

Based on CY 2018 Worldwide Revenue (1)

Based on CY 2018 Radio in the U.S. (2)

Based on CY 2018 Singles Market in the UK (3)

(1) Music & Copyright (2) Nielsen BDS (3) Sony Corporation Long Term Strategies Sony/ATV Music Publishing

1 Be the Destination For the Best Songwriters in the World

2 Leverage Our World Class Licensing Organization

3 Achieve Fair Digital Streaming Royalty Rates

4 Expand Our Presence in Emerging Markets

5 Differentiate and Grow through Proprietary Technology

Sony Corporation

Long Term Strategies (Continued) Sony/ATV Music Publishing

1 Be the Destination For the Best Songwriters in the World

Khalid Travis Scott

Sony Corporation Long Term Strategies (Continued) Sony/ATV Music Publishing

2 Leverage Our World Class Licensing Organization

Sony Corporation

Long Term Strategies (Continued) Sony/ATV Music Publishing

3 Achieve Fair Digital Streaming Royalty Rates

Sony Corporation Long Term Strategies (Continued) Sony/ATV Music Publishing

4 Expand Our Presence in Emerging Markets

Sony Corporation

Long Term Strategies (Continued) Sony/ATV Music Publishing

5 Differentiate and Grow through Proprietary Technology Administration Licensing Creative

SATV Proprietary Software

New Discover & Accompanying Analysis

Sony Corporation OP Bridge from FY17 to FY18 Sony/ATV Music Publishing

4 5 2 3 1 Removal of 39.8% prior ownership of EMI

Consolidation of 100% 2 of EMI

Declines in Physical 1 3 and Digital Download

4 Growth in Streaming

5 FX/All Other

FY17 FY18 Actual Pro Forma Sony Corporation

OP Bridge from FY18 to FY19 Sony/ATV Music Publishing 4 2 3 1 Declines in Physical 1 and Digital Download

2 Growth in Streaming

Consolidated Cost 3 Savings

4 FX/All Other

FY18 FY19 Pro Forma FCT Sony Corporation Music Segment Sony Music Entertainment (Japan) Inc.

Executive Vice President Sony Corporation

Chairman and Representative Director of the President and Representative Director of the Board, CEO Sony Music Entertainment (Japan) Inc. Board, COO Sony Music Entertainment (Japan) Inc. Michinori Mizuno Shunsuke Muramatsu

Music Segment (SMEJ)

Executive Vice President Sony Corporation

Chairman and Representative Director of the Board, CEO Sony Music Entertainment (Japan) Inc. Michinori Mizuno

Sony Corporation Music Segment (SMEJ)

Creating and Maximizing Hits  Strengthen music and anime IP  Leverage IP

Road to General Entertainment Company

Sony Corporation

Music Segment (SMEJ)

Digital Real Content

Artists, Songs, recorded music, anime, video, mobile game, characters, etc.

Live

Sony Corporation Music Segment (SMEJ) Function-basis Contents-basis

Label, Marketing & Distribution Artist & Music

Artist Management & Publishing

Visual Visual & Character

Solution

Entertainment Solution Net & Media/Live

Sony Corporation

Music Segment (SMEJ)

President and Representative Director of the Board, COO Sony Music Entertainment (Japan) Inc. Shunsuke Muramatsu

Sony Corporation 01∞

Sony Corporation

Sony Corporation 9 Sony Corporation