Sony Group (6758.T): SME management meeting: Strong catalog/high market share ensures favorable positioning in the Al era; Buy

Research evidence excerpt

Sony Group (6758.T): SME management meeting: Strong catalog/high market share ensures favorable positioning in the Al era; Buy

is a complex region where each country has

distinct characteristics. In the fast-growing Indian market, Sony Music already holds a

market share of around 25% as a top player, and its positioning is favorable. China’s

music market ranks in the global top five by size, but the market is fragmented with

many independent players. Sony Music is gradually expanding its market share in this

environment. The growth strategy in Asia and Eastern Europe combines organic growth,

M&A that provides opportunities to discover unique labels, and expansion of label

services to reach broader regions. The company will continue to focus on fast-growing

regions.

Relationship with DSPs: Major DSP partners have large user bases and are important to

Sony Music, while at the same time, Sony Music holds a large number of high-value song

catalogs. Management believes that Sony Music and the DSPs have a healthy

relationship, as DSPs need Sony Music’s rights in order to expand their services.

Management monitors ARPU in the streaming business as a key metric, but notes that

while subscriber numbers have grown significantly in the past, there has not been

significant growth in ARPU. Management believes there is significant growth

opportunity remaining in pricing.

Growth opportunities in e-commerce and merchandise as well: As a key strategic

priority, the company is building an audience database to understand the audiences of

its signed artists. Management believes that database development will enable effective

marketing campaigns and increase e-commerce sales. The company is also developing

global e-commerce infrastructure and platforms, and expects significant growth in