TOKYO, May 22, 2018 (News Wires) - Sony Corp said on Tuesday it would pay about $2.3 billion to gain control of EMI, becoming the world's biggest music publisher in an industry that has found new life in streaming services. The acquisition, which gives Sony a catalogue of more than 2 million songs from artists such as Kanye West, Sam Smith and Sia, is the biggest so far by new CEO Kenichiro Yoshida. The deal seeks to take advantage of the rapid growth in streaming music services like Spotify (SPOT.N) and Apple Music (AAPL.O) which has driven a recovery in the music industry. It also fits in with Yoshida's mission to make revenue streams more stable after his predecessor engineered a major turnaround that shifted the firm's focus away from low-margin consumer electronics to entertainment content and image sensors. "This investment in content intellectual property is a key stepping stone for our long-term growth," he told a news conference. EMI currently commands 15 per cent of the music publishing industry which with the current Sony ATV business would make the Japanese entertainment and electronics giant the industry leader with market share of 26 per cent, a company spokesman said. Other major players include Universal Music Group and Warner Music Group although their market share figures were not immediately available. Under the deal, Sony, which already runs EMI Music Publishing, will lift its ownership to roughly 90 per cent from 30 per cent currently by buying Mubadala Investment Company's holding. "The rise in digital streaming is also expanding songwriter royalty revenues, with Sony capturing value as manager of the copyrights backed by direct deals with the likes of Spotify, Apple Music, Google Play, SoundCloud and YouTube," Macquarie analyst Damian Thong said in a report. Yoshida, who took the helm in April, said his strategy was to prioritize stable cash flow while minimizing the impact of volatile sales cycles of game consoles and other electronics gadgets. In line with the strategy, Sony gave no operating profit target for the group in a new three-year business plan that the company announced on Tuesday. Instead, the company said it aims to generate a total of 2 trillion yen ($18 billion) or more in cash flow over the next three years, up by 500 billion yen from the last three years. Gaming and image sensors are set to remain the biggest profit contributors.
