BackSony using ‘Spider-Man’ to target $11 billion in film unit sales
Sales will rise to between $10 bn and $11 bn in 12 months ending March 2018, compared with $8.1 bn now, says Sony
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Tokyo: Sony Corp. said new Spider-Man movies and more content based on PlayStation video games will help drive revenue growth of as much as 36% at its pictures unit during the next three years.
Sales will rise to between $10 billion and $11 billion in the 12 months ending March 2018, compared with $8.1 billion now, the company said in a statement on Tuesday. Sony will focus on “tent-pole" movies and TV programs to increase operating income margin to as much as 8% from 6.6%.
Chief executive officer Kazuo Hirai made a case on Tuesday to investors for growth in the entertainment business, more than a year after rejecting Daniel Loeb’s push to spin off part of the unit. Hirai is looking for ways to link the popularity of content like the “Uncharted" game franchise and “Breaking Bad" TV series to demand for Sony smartphones and televisions.
“Entertainment business is an extremely important part of Sony," Hirai said at an investor briefing in Tokyo on Tuesday. “While it may seem like electronics is Sony’s main business and entertainment a sideline occupation, the entertainment business has been profitable for 18 straight years, delivering steady earnings."
Loeb’s Third Point Llc urged Sony last May to sell as much as 20% of its profitable entertainment unit in an initial public offering so the Tokyo-based company could focus on the electronics division. While Sony rejected the plan in August 2013, it sold its PC business and split its TV manufacturing unit into a separate operating entity.
Music sales
Shares of Sony surged 6.4% to ¥2,478.50 at the close of trade in Tokyo, the highest since April 2011.
The company expects to cut annual costs in the pictures unit by $300 million by fiscal 2016 after identifying an additional $50 million of savings, it said on Tuesday.
Hirai is still under pressure to prove that Xperia phones can compete with devices from Apple Inc. and Samsung Electronics Co. while making the TV manufacturing business profitable. He apologized to investors in July for forecasting an annual loss, only to widen the outlook fourfold less than two months later after a writedown in smartphone operations.
Sony today forecast sales in the music business of $4.8 billion to $5.2 billion in the 2017 financial year. That would represent growth of between zero and 8.3% from the current year, according to the company’s presentation. Sony’s recording artists include Beyonce, Bruce Springsteen and One Direction.
“In the movie business, we see media networks, TV and programme production as areas contributing to growth," Hirai said.
“For the music business, as sales of packaged media and downloads decline, we see opportunities in streaming and a chance to build on our high level of artist management capability to increase profitability." Bloomberg
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