Losses double at music arm of Sony

Hits by One Direction and Taylor Swift were not enough to prevent losses at the Irish arm of music giant Sony more than doubling last year.

New accounts show that operating losses at Sony Music Entertainment Ireland Ltd more than doubled from €429,000 to €862,000 in the 12 months to the end of March last. Revenues fell 14%, from €8.68m to €7.49m.

Pre-tax losses increased even more sharply, from €31,000 to €776,000, after net interest income of €398,000 recorded in 2011 plummeted to €86,000 last year.

The accounts lodged with the Companies Office show that the loss last year takes account of non-cash amortisation of intangible assets costs of €1.18m.

According to the directors’ report, “although, the physical sales market continues to fall year on year, the directors expect that digital sales will continue to grow very strongly”.

The directors state that Sony Music Entertainment Ireland continues to monitor and reduce its cost base and the directors feel that the company is well placed to return to profitability in the near future.

The directors point out that illegal downloading, physical piracy, downward pressure on recorded music, and growing competition for discretionary spending has led to the decline in physical recorded sales.

The directors state that “the company is a member of the Irish Recorded Music Association, which actively fights against illegal downloads and piracy”.

Their report states that the company seeks and continues to grow its market share through its unrivalled roster of existing music acts, an ability to launch and sustain highly successful breakthrough acts, innovative marketing campaigns, and high visibility at retail.

The directors are listed as Annette Donnelly, Michael Smith, and Ross Timmons.

According to the accounts, aggregate remuneration for directors last year increased from €396,000 to €413,000. Shareholder funds fell from €19.18m to €18.3m, which included €6.1m accumulated profits.