Sony's sales slip but profits go in One Direction to £15.2m
SALES at Sony's UK music operation slipped 2.4pc to £191m (€235m) in the 12 months to March 31, 2012, but pre-tax profits soared 128pc to £15.2m on the back of international demand for a handful of its artists.
Meanwhile, Simco, a company that does business as Syco and is 50pc owned by Sony, saw pre-tax profits climb 38pc to £32.6m, as turnover nearly doubled to £54.7m from £28.1m the year before.
One Direction's first album, 'Up All Night', went straight in at number one in the US charts in mid-March last year, after selling 176,000 copies in a week. The teen band made US music history in November when their second album, 'Take Me Home', also debuted at the top of the American charts after selling 540,000 copies, although those sales were not reflected in last year's accounts.
Nick Gatfield, chief executive of Sony Music Entertainment UK, and a former member of Dexy's Midnight Runners, the band behind 'Come on Eileen' and 'Too-Rye-Ay', said when he took the position in 2011 that he wanted to sign more local talent and export it around the world. The rise of social media platforms like Facebook and Twitter has made this process much easier, he added.
"The barriers are down now. One of the huge game-changers is the way we can exploit social media (to) bypass the traditional gate-keepers. The consumers, in One Direction's case, absolutely voted with their keyboards and helped them gain a following before (the album) launch."
Sony Music Entertainment UK was also buoyed by the success of new releases from Paloma Faith, The Vaccines and Neil Diamond.
However, the company's highest paid director took a pay cut, despite the strong performance. The unnamed director saw their total remuneration nearly halve to £952,508.
Sony declined to comment on whether the highest paid director was Mr Gatfield or Simon Cowell, whose Simco business channels certain payments through Sony's books. (© Daily Telegraph, London)