Sony 2009 Annual Report Download - page 32

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MUSIC
Sony’s music entertainment business consists primarily of Sony
Music Entertainment (SME), which operates worldwide outside
of Japan, and Sony Music Entertainment (Japan) Inc. (SMEJ),
which operates in the Japanese market, as well as our music
publishing joint venture, Sony/ATV Music Publishing (Sony/ATV).
Individually they operate as market-leading businesses, and
together they comprise the core of Sony’s music entertainment
assets.
Sony Music Entertainment
http://www.sonymusic.com/
Prior to October 1, 2008, Sony’s non-Japanese music
entertainment business was conducted by SONY BMG MUSIC
ENTERTAINMENT (SONY BMG), a 50% joint venture with
Bertelsmann AG. On that date, Sony acquired Bertelsmann AG’s
50% stake in the company, and SONY BMG became a wholly
owned subsidiary. From January 1, 2009, the company changed
its name to Sony Music Entertainment. In addition to being able to
further lower its cost base through increased efficiencies, having
SME entirely within the Sony Group will allow the company to
work more effectively with our Electronics, Game and Pictures
businesses.
During the fiscal year ended March 31, 2009, SME marked
its full re-entry into the Sony Corporation family by focusing on
generating hits for both well-known and emerging recording
artists, while also creating new and innovative business models
for a music market in transition.
SME’s continuing dedication to great artistry yielded hits from
established stars including AC/DC, Beyoncé, P!nk and Britney
Spears, and blossoming ones such as Leona Lewis, Kings of
Leon, Adele, Sara Bareilles and Jordin Sparks. As a result, SME’s
market share for the fiscal year increased over that of the previous
year, with its share of music from “breakout” artists (artists who
recently made their major label debut) topping the industry.
As a company, SME continued its ongoing evaluation of how
it manages its bottom line and continued to work to transform its
business to include significant and growing digital sales, as well
as developing other revenue streams such as live concerts, artist
management and sponsorships.
On the digital front, SME signed important licensing deals with
Sony Ericsson, Apple, Nokia, Vodafone, MySpace and Amazon,
among others. This further expanded the number of service
providers offering music from our artists and diversified the ways
consumers can acquire music to include a variety of buy-to-own,
subscription and ad-supported models.
SME also played an active role in the ongoing Sony United
initiative, integrating its music into a wide range of Sony products
and related services, including Sony Ericsson’s PlayNow plus,
as well as X series and other Walkman® pre-loaded with a variety
of songs and videos from hot, new artists. SME released over
a dozen new titles in the Blu-ray Disc format, and collaborated
with Sony Pictures Entertainment on music components from the
latest James Bond movie, Quantum of Solace.
Sony Music Entertainment (Japan)
http://www.sonymusic.co.jp
SMEJ’s business portfolio, in addition to music production, also
includes artist management, and video and media production.
Concurrent with the acquisition of Bertelsmann AG’s 50% stake
in SONY BMG, BMG Japan (BMJ, the BMG Label Group’s
Japanese operations), formerly part of SONY BMG, became a
subsidiary of SMEJ.

SME
25.7%
EMI
9.0%
Other
12.5%
Universal
31.2%
Warner Bros.
21.6%
U.S. Market Share (April 2008 - March 2009)