Sony Music's 2013 earnings and an investment in Infibeam Digital

A couple of interesting news coming from Sony Music today. First of all the company announced purchasing 26% of Infibeam Digital Entertainment in what is rumoured by Business Standard to be a multi-million dollar deal.

Sony’s interest in Infibeam lies with the company’s Indent product, which was launched in 2012 and enables companies to build music-related services on a variety of platforms providing easy billing and payment solutions.

In particular when Indent launched its Download product in 2012 the Sony Music Website was the its first major customer, allowing consumers to buy songs from across the entire Sony Music Entertainment catalogue. It is likely that with this proving to be a successful partnership Sony Music wanted to have more control on the company and ultimately the product.

In other news, today Sony Music's parent company Sony Corporation announced its 2013 earnings reporting losses of $1.25 billion, so pretty grim news for investors on that front.

Sony Music though put in a solid performance and whilst recorded music sales declined - Sony Music pointed at the contraction of the Japanese music market as the main reason for that - if the results of the music publishing division and of other music-related services are factored in the overall revenues were basically flat.

It’s hard to point at numbers in this case because on paper it looks as if sales and operating revenues increased by 13.9%, that increase though is due solely to the favourable impact of depreciation of the Yen against the Dollar rather than to an actual increase in sales.

So, some tough times ahead - Sony has had a rough ride especially since the company’s declining revenues were further hit by the 2011 earthquake and tsunami that deepened the crisis. The company has warned investors that it may not see profitability until 2015 at the earliest.

(Andrea Leonelli)