Sony 2008 Annual Report Download - page 31

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calendar year 2007 and enjoyed success
with a wide range of both new and car-
ryover releases, including multimillion-selling
albums from artists such as Daughtry,
Alicia Keys, Avril Lavigne, Celine Dion,
Bruce Springsteen and Foo Fighters.
Breakthrough artist development success
stories included Leona Lewis, Sara Bareilles
and Sean Kingston.
SONY BMG also continued to assert its
presence in the Internet and mobile phone
arenas, with digital sales representing 31%
of SONY BMG’s revenues in the U.S., and
18% of revenues worldwide.
During the period under review, SONY
BMG began providing music via global social
networking website MySpace and formed
MySpace Music with other major music
companies—a joint venture that aims to serve
as an interactive online platform for music
sales, subscription services and ad-supported
entertainment. SONY BMG also participated
in “Comes With Music,” a concept which
offers mobile phones bundled with access
to music, enabling users to download and
listen to as many celebrated recordings by
legendary SONY BMG artists as they like.
To encourage interoperability across the
music market, SONY BMG also announced
an agreement with Amazon for the sale of
music MP3s that can play on computers as
well as all MP3 players—including the iPod.
In the U.S. and Canada, SONY BMG
launched MusicPass, a series of MP3 gift
cards that provide consumers with access
to digital albums and bonus material. A
similar product, musicbon, was launched
in Germany.
Moving ahead, SONY BMG plans to
develop new products, explore additional
distribution channels and develop a wide
range of business models.
Primarily within the music production
industry, Sony Music Entertainment
(Japan) Inc. (SMEJ) conducts artist man-
agement, and video and media production,
among others. In fi scal year 2007, top SMEJ
artists including ORANGE RANGE, Ken Hirai,
YUI, L’Arc-en-Ciel, Mika Nakashima and
YUKI contributed signifi cantly to both sales
and income, while CDs by artists such as
Aqua Timez, ikimono-gakari, Yuna Ito,
UVERworld and chatmonchy recorded
favorable sales.
In addition to CD sales, SMEJ is also
focusing on digital distribution, and in the
period under review the Chaku-Uta® and
Chaku-Uta Full® master ringtone download
services continued to perform extremely well,
and contributed signifi cantly to earnings. In
addition, the animation-focused video pro-
duction business has undertaken new initia-
tives, and in April 2008 released Ano Sora
wo Oboeteru in collaboration with Sony
Pictures Entertainment (Japan).
The era of digital distribution has arrived, as music, fi lms, games and other content
can now be delivered to a variety of hardware through networks. Sony aims to
maximize the potential of the digital distribution age.
Sony is also focusing efforts on expanding
its music publishing business. Sony/ATV
Music Publishing (Sony/ATV)—a joint
venture between Sony and Michael
Jackson—owns or administers more than
500,000 copyrights and has achieved
considerable success in capitalizing on
these copyrights. In the period under
review, Sony/ATV bolstered its business by
increasing its focus on signing artists and
acquiring catalogs. Two key acquisitions
were Famous Music, which includes
classics such as “Footloose,” “Moon River,”
“Take My Breath Away,” “It Don’t Mean a
Thing (If It Ain’t Got That Swing),” “Satin
Doll,” “Silver Bells,” and “That’s Amore,” and
the Leiber–Stoller catalog, which includes
many of Elvis Presley’s greatest hits.
Digital distribution is also expanding as
a sales channel for publications. Sony
has offered Portable Reader System in
the U.S. market since 2006. A single
device allows the user to download
hundreds of e-books for easy portability
and an innovative reading experience.
Internet protocol television (IPTV) service
uses an Internet protocol to deliver digital
content over a broadband connection.
Subscribers to Sony’s IPTV service can
enjoy such content simply by connecting
the receiver directly to a BRAVIA LCD
television.
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