Sony 2005 Annual Report Download - page 20

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18 Sony Corporation
MUSIC http://www.sony.net/music/
The creation of the SONY BMG joint venture enables the company to continue to
invest aggressively in new talent and develop new musical content throughout its
worldwide operations. During the year, successful artist development efforts delivered
strong results from such artists as Anastacia, Ciara, Destiny’s Child, John Legend,
Jennifer Lopez, Mario, Maroon 5, Britney Spears, Rod Stewart, Usher and Gretchen
Wilson. At the 47th Annual GRAMMY® Awards ceremony, the newly combined
company led the industry with a total of 28 GRAMMY® Awards in a wide range of
genres, including R&B, pop, rock and country, with awards going to such artists as
Alicia Keys, Usher, John Mayer, Los Lonely Boys and Gretchen Wilson.
The merger also provided the company with the resources to continue to build on
its position as a global leader in the growing online and mobile music markets. SONY
BMG aggressively expanded its efforts in the mobile arena by establishing new
relationships for the distribution of master ringtones, which are actual recordings that
replace the standard mobile phone ringer, and ringback tones, which are recordings
that take the place of the ringing sound callers traditionally hear when dialing. The
company also entered into agreements with wireless carriers in Europe and Asia to
facilitate the growth of 3G mobile services, which provide such features as full-length
audio and video offerings. Master ringtones represented one of the largest areas of
growth in wireless service, with a number of master ringtones achieving total sales of
more than a million units during the fiscal year ended March 31, 2005.
Even as the music company forged a wide range of new relationships for the digital
distribution of its content, it also played an active role in the successful introduction of
a new product designed to rejuvenate the traditional retail market. In the United
States, SONY BMG led the music industry’s rollout of DualDisc, a new, two-sided,
single-disc product that combines DVD video content and enhanced audio on one
side, with a full-length audio album on the other. High-profile titles such as Omarion’s
debut release O and Jennifer Lopez’s Rebirth were issued simultaneously on CD and
DualDisc, with DualDisc accounting for well over 30% of weekly sales for both titles.
Sony Music Entertainment Japan
http://www.sonymusic.co.jp/
In the fiscal year ended March 31, 2005, a string of hits from leading artists, including
ORANGE RANGE’s musiQ, Ken Hirai’s SENTIMENTALovers and Porno Graffitti’s
PORNO GRAFFITTI BEST BLUE’S, contributed to sales of Sony Music Entertainment
(Japan) Inc. (SMEJ). During the period, SMEJ continuously enjoyed the top share of
the Japanese music market in terms of sales. At the 19th Japan Gold Disc Awards,
ORANGE RANGE was named Artist of the Year, while releases by SMEJ artists
garnered seven of 20 Japanese Rock and Pop Album of the Year awards.
SMEJ also took steps to accelerate growth in its network service business.
Downloads from SMEJ’s various services, including Chaku-Uta®, launched in 2002,
and Chaku-Uta Full™ master ringtone download services, are currently in the order of
5.0 million per month, and SMEJ continues to enjoy the top share of this key market
in terms of revenues.
Sony will continue to grow its music business in Japan by developing new talent
and providing exciting new recordings, while at the same time cultivating new ways of
enjoying music that take advantage of technological advances.
Sony Music Network is leading the
evolution of network music services
in Japan.
Capitalizing on its digital network capa-
bilities, on April 1, 2005, SMEJ estab-
lished Sony Music Network Inc. The new
company operates SMEJ’s Internet
music distribution site, Sony Music
Online Japan, a pioneering site that
offers fee-based downloads of copy-
right-protected music, as well as music
video clips and a wide range of other
visual content.
The online music download service
market is expanding rapidly, and signs
point to further growth as the number
of Internet and advanced mobile phone
users rises. This trend is signaling a
crucial change in the way people enjoy
music. By upgrading and strengthening
its Internet music distribution services,
Chaku-Uta® mobile phone master
ringtone download service and other
offerings, Sony Music Network aims to
bring entertainment even closer to its
customers. The company will also focus
on developing new businesses in such
areas as e-commerce and network-
based music and video promotions, with
the aim of further maximizing its digital
network capabilities.
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