If there's one person Sony shareholders should thank for the increase in operating profit last year, it's Adele.
The six-time Grammy award-winning singer spearheaded growth in sales and operating profit at the company's music division, helping it boost margins to become Sony's most profitable nonfinancial business.
According to a Sony report released Thursday, Adele's album "25", released in November, was the company's best-selling recorded music item for the year ended March 31. She was joined at the top of Sony's album charts by two other British artists: the boy band One Direction, and David Bowie, whose album Blackstar was released just days before his death from liver cancer in January.
A major part of Sony Music's success last year was its digital business, which grew 23 percent, led by a 57 percent jump in revenue from streaming music. Importantly, digital downloads were only slightly cannibalized by the increase in streaming, with revenue there sliding 3.4 percent.
Music accounted for just 7.6 percent of Sony's sales last year while contributing 30 percent of operating profit.
Overall, music sales rose 10 percent, while operating profit jumped 44 percent. Sony says that performance won't be repeated this year: Revenue will fall 11 percent, dragging operating profit down 28 percent. (Sony didn't release forecasts for most of its divisions as it assesses the impact of this month's earthquake in Japan.)
"Negative: Lower sales from Recorded Music’s titles compared to the hit titles in FY15," Sony said of its outlook for fiscal 2016.
Neither Adele nor Bowie released top-10 albums in 2014, so their new releases last year were a huge boost. Arguably much of Bowie's success can be attributed to his passing, just as Prince occupied the top two spots in the Billboard 200 this week. While One Direction's youth focus means its continued success is never assured, Adele is a known hit machine.
Meghan Trainor -- Sony's No. 4 artist last year -- is due to release ``Thank You" next week, and the near-term release schedule includes albums from Usher, Pitbull, Bob Dylan and Celine Dion. Given Sony's bearishness for the year ahead, the company doesn't expect any of those to become a runaway success.
While Sony's music division deserves a standing ovation for its 2015 tour, don't expect an encore.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story:
Tim Culpan in Taipei at firstname.lastname@example.org
To contact the editor responsible for this story:
Paul Sillitoe at email@example.com