Sony’s Strategy Shift Shuts Down Sale Rumors


More than a decade before launching its iconic Walkman in 1979, Sony made its first foray into content with a CBS/Sony Records joint venture in 1968, then a groundbreaking deal with an overseas company under new Japanese laws. A decade later, Sony had acquired both Columbia Records and Columbia Pictures.On May 22 at Sony’s Tokyo headquarters, new CEO Kenichiro Yoshida noted it was the 50-year anniversary of the CBS/Sony Records deal as he laid out a strategy shift toward content in its three-year business plan. While some observers had suggested Sony’s entertainment divisions were losing their biggest cheerleader when Kaz Hirai handed the reins over to Yoshida on April 1, the former CFO positioned IP content as a major driver of midterm growth.That’s good news for Sony Pictures, which has been plagued by rumors of being for sale, but it’s not altogether a shock. After selling more than 81 million electronic devices in 2011, Sony sold only around half that number in 2017.With healthy cash reserves and predictions of generating $18 billion more by 2021, Sony will be looking to bolster its entertainment businesses. But finding targets fitting Yoshida’s model of stable, recurring revenue generators won’t be easy, particularly in the film and TV business.”In my view, the company should put more priority on investing in music rather than movies,” says Masahiro Ono, a Sony analyst at Morgan Stanley in Tokyo. “It already has the global number one position as music publisher and may target being number one as a label.”Northlake Capital Management founder Steven Birenberg, who owns Sony stock, is “a little surprised they sounded so aggressive about building their business at their analyst day.”Both Ono and Birenberg see acquisitions abroad – such as in India, where Sony has built a network of TV channels – as more likely than a major Hollywood deal.”Last year Sony failed to get the IPL [broadcast rights to the Indian Premier League cricket competition] and tried to offset that with the Ten Sports [Indian sports network] deal,” says Ono. “But that’s not enough and I think it will look for another media network. That is more likely than it acquiring a studio.”

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