Sony 2015 Annual Report Download - page 55

As of March 31, 2015, unrecognized license fee revenue at SPE was approximately 1.4 billion U.S. dollars.
SPE expects to record this amount over a ten year period, having entered into contracts with television
broadcasters to provide those broadcasters with completed motion pictures and television programming. Under
current revenue recognition requirements and SPE’s policies, the license fee revenue will be recognized in the
fiscal year in which the product is made available for broadcast.
Below are the sales to external customers by product category:
Sales to external customers by product category
Figures in parentheses indicate the percentage contribution of each product category to the segment total.
Fiscal year ended March 31 Percent change from
2014 2015 2016 2014 to 2015 2015 to 2016
(Yen in millions)
Motion Pictures 422,255 (50.9) 434,253 (49.6) 447,355 (47.8) +2.8% +3.0%
Television Productions 247,568 (29.9) 252,456 (28.8) 270,115 (28.9) +2.0 +7.0
Media Networks 158,845 (19.2) 189,605 (21.6) 218,357 (23.3) +19.4 +15.2
Pictures Total 828,668 (100.0) 876,314 (100.0) 935,827 (100.0) +5.7 +6.8
Music
Music segment results presented below include the yen-translated results of SME, a U.S.-based operation
that aggregates the results of its worldwide subsidiaries on a U.S. dollar basis, the results of Sony Music
Entertainment (Japan) Inc. (“SMEJ”), a Japan-based music company that aggregates its results in yen, and the
yen-translated consolidated results of Sony/ATV Music Publishing LLC* (“Sony/ATV”), a 50 percent owned
U.S.-based consolidated joint venture in the music publishing business that aggregates the results of its
worldwide subsidiaries on a U.S. dollar basis.
* Sony and the Estate of Michael Jackson (the “Estate”) entered into a binding Memorandum of Understanding
on March 14, 2016 and a definitive agreement on April 18, 2016, for Sony to obtain full ownership of Sony/ATV
by acquiring the 50 percent interest in Sony/ATV held by the Estate. The closing of the transaction is subject to
certain closing conditions, including regulatory approval.
Fiscal year ended March 31, 2016 compared to fiscal year ended March 31, 2015:
For the fiscal year ended March 31, 2016, sales increased 10.4 percent year-on-year (a 5 percent increase on
a constant currency basis) to 617.6 billion yen primarily due to the impact of the depreciation of the yen against
the U.S. dollar. The increase in sales on a constant currency basis was primarily due to significantly higher
Visual Media and Platform sales reflecting the continued strong performance of a game application for mobile
devices. In Recorded Music, digital streaming revenues significantly increased, partially offset by a worldwide
decline in physical and digital download sales. The fiscal year ended March 31, 2016 included the record-
breaking sales of Adele’s new album 25. Other best-selling titles included One Direction’s Made in the A.M.,
David Bowie’s Blackstar and Meghan Trainor’s Title.
Operating income increased 26.7 billion yen year-on-year to 87.3 billion yen. This increase was primarily
due to the above-mentioned gain recorded on the remeasurement to fair value of SME’s 51 percent equity
interest in The Orchard as well as the impact of the above-mentioned increases in digital streaming revenues in
Recorded Music and in Visual Media and Platform sales. Partially offsetting the increase was the negative impact
of the above-mentioned decline in physical and digital download sales in Recorded Music.
Fiscal year ended March 31, 2015 compared to fiscal year ended March 31, 2014:
For the fiscal year ended March 31, 2015, sales increased 8.2 percent year-on-year to 559.2 billion yen,
primarily due to the favorable impact of the depreciation of the yen against the U.S. dollar. Sales were essentially
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