Sony Pictures Entertainment’s film and television operations are not for sale or about to be hived off, Sony Group CEO Yoshida Kenichiro said Wednesday. Instead, he regards it as a core piece of the group mission to “fill the world with Kando (the Japanese word for ‘emotion’) through the power of creativity and technology.”
The Japanese entertainment and technology group has seen its shares rise strongly in 2021, powered by strong earnings and revised valuation estimates for studio properties. The smaller MGM studio is being acquired by e-commerce giant Amazon for $8.45 billion in order to feed its Amazon Prime streaming service.
Unlike other Hollywood studio operators Disney, WarnerMedia, NBC Universal and Paramount, SPE is not attempting to break into the global direct-to-consumer video business with the launch of its own subscription video platform. That has fueled speculation that SPE could be left behind in the streaming race or acquired like MGM by a tech giant as part of the ongoing media-tech consolidation process.
In an interview with the Financial Times, Yoshida said: “There is drastic realignment in the media industry, but I think our strategy of creating content as an independent studio while working with various partners will work.”
Among these partnerships are two recently-announced deals to license its content to Netflix and to Disney in different pay-TV windows. Sony is also trying to make all the different parts of its music, games and video group work better together.
“I think the reason we were able to sign good deals with Netflix and Disney is because they were attracted to our PlayStation Productions pipeline. We can strengthen our ability to create content through such group-wide collaboration,” Yoshida said.
In notes released on Wednesday, ahead of a two-day investor relations presentation by Sony’s section heads, Yoshida gave two examples of intra-group collaboration. Record-breaking Japanese film “Demon Slayer The Movie: Mugen Train” originated as a comic, before becoming an anime TV series and a theme song. He confirmed plans to rework it as a game as well. Yoshida said hit PlayStation Game “Uncharted” is being made as a movie and is one of many joint projects between SPE and Sony Interactive Entertainment (SIE).
Yoshida said that while Sony is not launching a mass streaming business, it is not turning its back on D2C. “Sony plans to strengthen its initiatives in the service, mobile and social spaces to further expand these communities, and seeks to expand the number of people around the world directly connected to the Sony Group due to their desire to consume entertainment from the current number of approximately 160 million to 1 billion people,” he said according to the notes.
This means “strengthening the PlayStation Now cloud streaming game service and … investing in or partnering with external studios.” In late 2020, it agreed to acquire a specialist anime streaming company Crunchyroll, though that deal remains under scrutiny by U.S. regulators.
Yoshida told the Financial Times that “MGM has an incredible library [of movies and shows], but everything comes with a price.”
In his strategy notes, Yoshida said that in the three years from now until March 2024 Sony plans to allocate JPY2 trillion ($18.4 billion) for “strategic investment, and investment towards growth in the IP and DTC business; technology; and share repurchases.”