Sony’s Michael Lynton Talks of ‘Shift in Emphasis’ from Movies to TV

With new scrutiny from key shareholders, Sony Entertainment CEO Michael Lynton said that they are embarking on “a new era of transparency and accountability,” as Sony’s CEO Kazuo Hirai said that they would have “an intense focus on rigorous cost management across the board.”

He also signaled “a shift in emphasis from motion pictures to television production.”

READ MORE: TV Takes Center Stage at Sony Pictures Investor Confab

Lynton and Hirai were expected to highlight the efficiencies and growth opportunities through the morning investor conference, held on a soundstage on the studio lot. Lynton talked of a “down payment” on future growth prospects with premium content for an array of platforms.

“Here is a guiding principle for us: No cost is too sacred to cut or too small to examine,” he said.

Lynton outlined prediction of $8.4 billion in revenue in fiscal 2015, with a 7.5 operating profit. He said that revenues through 2017 should grow at the low- to mid- single digits, and operating income at the high single- to low- double digit rates.

Meanwhile, starting next year, the Sony logo will be featured at the start of each release.

Earlier this week came reports, confirmed by Variety, that Sony was hiring Bain & Co. to help it identify cuts in its studio division, with estimates that $100 million or more would be targeted via overhead and potential layoffs. A spokesman for Sony Entertainment said that it was part of a four-year process of reviewing its business “to identify further efficiencies.”

Although the studio has seen success with the fall release “Captain Phillips,” it had a rough summer, with “White House Down” and “After Earth” proving disappointments. Sony Pictures recently reported a loss of an estimated $182 million in the second quarter ended Sept. 30, with sales revenues dropping by 13% in U.S. dollar terms. The company cited lower TV licensing, a weaker home entertainment business and smaller theatrical revenues, and specifically mentioned the poor performance of “White House Down.”

Hirai said that the operating profit in the pictures division was likely to be flat for the year.

In the quarter, revenue at Sony Music was essentially flat ($1.1 billion) but profits perked up ($99 million) thanks to currency exchange rates and solid sales for Justin Timberlake’s “The 20/20 Experience” and a handful of other releases.

In May, Third Point’s Daniel Loeb, a major shareholder with about 7% of the company, proposed the idea of spinning off those assets as a way of boosting transparency and accountability, criticizing the studio for lagging behind competitors in profitability. He struck a more conciliatory tone after the spin off offer was rejected but told Variety that he still expected “more disclosure and a more detailed plan for how they will improve profitability in their entertainment division, including specific profitability targets.”

But Hirai and Lynton talked of the fusion of software and hardware, including the development of 4K content and TV sets and exclusive film content for the Playstation.

“I know that the whole of Sony is greater than the sum of its parts,” Hirai said at the start of the conference.

More Biz

  • Wendy Goldstein Named Republic Records President,

    Republic Records Names Wendy Goldstein President of West Coast Creative

    Republic Records advances Wendy Goldstein to President of West Coast Creative, label co-founders and chief executives Monte and Avery Lipman announced today. Goldstein has overseen the company’s Santa Monica office since 2017 as EVP of Republic Records. Over the past year, she headed up the label’s efforts for Ariana Grande’s  back-to-back No. 1 debuts for the singer’s “Sweetener” and “Thank U, Next” albums, and [...]

  • The Traitor

    MMC Studios, One of Germany's Biggest Production Facilities, Changes Hands

    Germany’s MMC Studios, which has hosted such recent international productions as Joseph Gordon-Levitt thriller “7500” and Marco Bellocchio’s Cannes competition film “The Traitor,” is changing hands. Frankfurt-based investment company Novum Capital has acquired the facility in Cologne, one of Germany’s biggest film and TV studios, from Luxembourg private equity fund Lenbach Equity Opportunities I. The [...]

  • Hayley Kiyoko Signs Global Publishing Deal

    Hayley Kiyoko Signs Global Publishing Deal With Kobalt

    Singer-songwriter-actor Hayley Kiyoko, seen most recently in a cameo in Taylor Swift’s “You Need to Calm Down” video, has signed an exclusive worldwide publishing agreement with Kobalt, the company announced today. The partnership includes publishing administration, creative services and synch for all of her catalogue and future works. Jamie Kinelski, VP, Creative, Kobalt said, “Hayley [...]

  • billy porter gay pride todd snyder

    How Hollywood Is Celebrating Pride Month

    Pride Month officially wraps up this weekend with the WorldPride Parade in New York. It takes on special significance this year, as attendees mark the 50th anniversary of the Stonewall uprising. A number of artists and brands are also getting involved, launching “Pride-themed” collaborations and merchandise in an effort to boost their own visibility within [...]

  • Shawn Strickland, Tony DiSanto - Allyance

    Tony DiSanto's Allyance Media Taps Verizon Veteran Shawn Strickland as President (EXCLUSIVE)

    Shawn Strickland, a veteran of Verizon and Complex Media, has joined Tony DiSanto’s Allyance Media Group as president. In the role, Strickland is heading up business operations and spearheading partnerships for the multiformat media and production company. DiSanto and financier Matthew Bruderman formed Allyance Media Group last year. The New York-based company encompasses DIGA Studios, [...]

  • Andy Signore Screen Junkies

    'Honest Trailers' Creator Andy Signore Settles Defy Media Suit

    Andy Signore, the creator of Screen Junkies’ “Honest Trailers,” has settled a lawsuit against Defy Media challenging his firing for alleged sexual misconduct. Signore was one of the first figures to lose his job in the aftermath of the Harvey Weinstein harassment revelations in October 2017. Defy Media, which then owned Screen Junkies, terminated him [...]

  • Singer-rapper Psy performs during the 70th

    YG Agency Boss Quits as K-Pop Scandals Expand

    Yang Hyun-suk last week resigned from his remaining positions at YG Entertainment. The talent agency he co-founded is deeply mired in a series of inter-linked scandals that stretch from drugs to prostitution. Problems started with the band Bigbang and its star Seungri, but now also encompass other YG artists. Hwang Bo-kyung was appointed as the [...]

More From Our Brands

Access exclusive content