Stringer acknowledges belt tightening

Sony America CEO backs screener ban

HOLLYWOOD — Addressing a crowd of industry leaders in Los Angeles on Wednesday, Sony Corp. of America chairman and CEO Howard Stringer spoke out vehemently against piracy and called the MPAA screener ban “a reasonable action.”

Separately, Stringer acknowledged recent operating woes at Sony have prompted new belt-tightening at Sony Pictures Entertainment. He declined to discuss details but confirmed a report that up to 300 jobs would be cut over the next 18 months.

Cost-cutting campaign — aiming for tens of millions of dollars in savings following poor back-to-back financial results for Sony Corp. — will likely include both layoffs and job eliminations through attrition.

The cuts are expected to hit most SPE units, though TV operations are likely to escape much scrutiny following big payroll reductions a year ago.

Stringer called the planned cutbacks “sad but inevitable.” Cuts rep about 5% of SPE’s worldwide work force of more than 5,500.

He vowed vigilance on the piracy front. “Like most American companies, we’re forced to confront all the competition out there and the piracy,” he said.

Stringer was the last studio CEO to be approached and agree to the controversial ban on the Oscar screeners ban, doing so somewhat ambivalently.

In his Town Hall Los Angeles address at the Beverly Hilton, he stressed empathy for indie film companies and the majors’ specialty labels, which say they will be most damaged by the action given smaller marketing budgets to reach Oscar voters.

“I know what it’s like to sing noisily for my supper and the difficulty of getting into the crowded marketplace,” said Stringer, who in a former life was a documentary filmmaker.

As for why he agreed to the screeners ban — which he called a “complex issue” — despite his reservations, he said: “I wanted to enter the debate thoughtfully without upsetting the apple cart.”

He said he did not know if a compromise would result from a meeting today with Jack Valenti and studio heads, nor if he would be part of the conversation.

As though addressing the fears of the indie community, Stringer emphasized the power of word of mouth acclaim when it came to promoting a film. “This business is subtly about word of mouth,” he said. Word of mouth from “the critical community” and “the water cooler,” he said, were important vehicles for buzz.

The core of Stringer’s speech, however, condemned piracy, which he said is responsible for the loss of $3 billion-$4 billion in the film industry and almost $7 billion in the music industry.

“Piracy is the critical issue of the digital age,” he said. “Its scope is vast, its practitioners relentless.”

He went on to suggest that the film industry could learn from the music industry’s “multipronged” approached to fighting piracy — education, litigation and the creation of legitimate alternatives — but that the music industry had “missed more than one boat” along the way.

Sony, he said, was committed to developing new DRM (digital rights management) strategies.

Finally, Stringer stressed the growing importance in the digital age of companies like Sony, which produce both entertainment and entertainment technology.

“As content and development become more intertwined, companies like Sony will help drive the demand for hardware,” he said.

The chieftain opened his remarks with an introduction of Sony’s latest robot QRIO, who showed off his latest moves to music for the audience, and quips about California politics.

“I’ve spoken with studio execs who are worried about Arnold Schwarzenegger. They’re afraid that he’s so ambitious that he won’t be satisfied just as governor,” he said. The fear is that the Governator will want the ultimate power position: running a studio.

(Carl DiOrio and Josef Adalian contributed to this report.)

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