Sony plans entertainment turnaround after substantial Q3 losses
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Rebecca Hawkes
| 03 February 2017

Sony says it will pursue new sales channels and movie merchandising opportunities to turnaround performance in its film and TV division, after posting losses of US$913 million.

The division’s net loss of $913 million for the third quarter of 2106 included a $962-million write-down, Sony has disclosed.

The decrease in sales was due to “significantly lower sales for motion pictures, partially offset by significantly higher sales for television productions”, the company said. These included higher subscription video-on-demand (VOD) licensing revenues.

Sony Pictures’ sales and operating income showed a 5% drop in US currency, from $2.16 billion to $2.06 billion, or a 14% decrease when reported in Japanese yen.

Overall, Sony’s sales and operating revenue for the quarter ending 31 December 2016 decreased by 7.1% compared to the same period a year earlier, to ¥2,397.5 billion ($20,668 million). Sony said the decrease was mainly due to the impact of foreign exchange rates.

Sony Pictures’ current predicament stems in part “from Sony’s focus on short-term profit over many years,” said CFO Yoshida. Examples included the sale of rights to Spider-Man merchandise and a Latin American TV channel in fiscal 2011, he said.

At a briefing on 2 February, the Japanese electronics giant said it has no plans to sell Sony Pictures Entertainment, which accounts for about a tenth of Sony Corp’s overall sales.

“We believe in long-term upside potential for pictures,” chief financial officer Kenichiro Yoshida was quoted as saying by the Reuters news agency.

Sony will now seek to exploit film character merchandising, as well as new sales channels, with the Chinese film market seen as potentially lucrative. In terms of television, areas for expansion could include India, where Sony Pictures Television has recently been given clearance to acquire Zee’s sports network Ten.

Sony Corp CEO Kazuo Hirai has also become more hands-on in the Pictures division, where he is seeking a successor to Michael Lynton, CEO of its parent company Sony Entertainment.

Lynton is resigning after more than 12 years at the helm of Sony Entertainment, though he will remain at the business for six months working alongside Hirai to assist in finding and briefing his replacement.