With a goal of enriching its music content portfolio, Sony Corp. announced Tuesday it will acquire a majority stake in EMI Music Publishing, which holds the rights to about 2.1 million songs, for $1.9 billion (¥211 billion).
Sony’s U.S. subsidiary will buy a roughly 60 percent stake in EMI from a consortium led by Abu Dhabi-based Mubadala Investment Co., raising its shares from the 30 percent it already owns. The unit’s catalog includes songs from popular singers such as Kanye West, Alicia Keys and Pink.
The internet age had hit the music industry hard, with a shift to digital downloads leading to falling CD sales starting in the late 1990s. But the market has regained momentum with a spread of subscription-based music streaming services, Sony CEO Kenichiro Yoshida said.
To take advantage of the new business climate, “quality and quantity of intellectual property is essential,” Yoshida said during a news conference at Sony’s headquarters in Tokyo.
“(The acquisition of EMI) is an investment to beef up our content catalog. Once this deal is complete, we will become one of the biggest music publishing firms in the world.”
The announcement is in line with Sony’s new three-year strategy plan unveiled Tuesday by Yoshida, who took the helm of the conglomerate last month.
He noted that Sony’s content business, as well as electronics and semiconductors, will be its main focus through the 2020 fiscal year.
As Sony has seen solid earnings from its video game, music and movie businesses, boosting its intellectual property portfolio will lead to further growth, Yoshida said, adding that efforts such as cultivating more new artists and anime characters will be important.
Yoshida said Sony aims to generate a total of ¥2 trillion in operating cash flow in three years. The firm plans to spend ¥1 trillion from there, mainly to strengthen its semiconductor unit, as development of self-driving technologies are likely to push demand.
But Yoshida refrained from disclosing an operating profit goal for fiscal 2020.
“We think looking at a longer-term management plan is important,” he said. “I understand that showing an operating profit target for the 2020 business year is important. But my concern is that our employees might be focused too much on just achieving that three-year goal.”
Yoshida, the firm’s former chief financial officer, succeeded current Chairman Kazuo Hirai, who headed the company for six years.
Hirai helmed the company’s resurgence over the last three years. The company achieved the previous set of three-year goals by posting ¥500 billion or more in operating profit, along with a return on equity of 10 percent or more in the last business year.
Sony turned in a record operating profit of ¥734.9 billion in fiscal 2017.