Speculation about what Sony will do with its entertainment divisions has been around since, oh, about five minutes after the electronics pioneer first bought its entertainment divisions in the late 1980s. That speculation is perhaps louder than ever amid percolating aggregation fever in Hollywood, but the company’s CEO made it known during CES Week that Sony is big enough to be a buyer, not a seller.
CES is when Sony Electronics traditionally spotlights the TVs, pro production equipment, cameras, audio gear and other hardware used to create and play back all the movies, music, games and episodic series made by its entertainment divisions.
Amid a pandemic-thinned Las Vegas gathering, Sony once again showed a herd of humongous high-end TV screens, including a new hybrid OLED/quantum dot technology (OLED-QD for you acronym fans) and high-end Mini-LED screens.
Of note: the sets will come with Sony’s own streaming service, the still not-quite-developed Bravia Core; the Google TV interface; “Netflix Adaptive Calibrated Mode,” to make sure the streaming giant’s shows always look like they’re supposed to; and “Bravia Cam,” which will watch you watching TV. Bravia Cam is effectively a webcam on steroids for the living room, also bringing gesture controls, and sound and picture adjustments depending on where you sit, among other slightly creepy but useful capabilities.
Reflexive privacy concerns aside, the Bravia Cam is one way to improve a festering issue for streaming services and the tech behind them: three in five streaming subscribers don’t like their viewing experiences, according to a new Accenture study.
Nearly half those surveyed said they spend at least six minutes looking for something to watch across all their services. More than half wish their profile could be shared across multiple services. No wonder a study by Deloitte last month predicted 150 million subscription cancellations this year.
All of which makes Sony CEO Kenichiro Yoshida’s comments about the company’s future even more interesting as the mid-sized conglomerate tries to remain both independent and relevant amid a bunch of very large competitors.
“Entertainment is Sony’s DNA,” Yoshida said in an interview released this past week. We’ll disregard that the DNA was added, CRSPR-style, decades after the company was founded. It’s more or less incorporated now, though the company remains notoriously siloed.
And it’s true that Sony Pictures Entertainment has had a few great weeks. Its Marvel co-production, Spider-Man: No Way Home, was 2021’s biggest film by a long way, racking up $1.5 billion in theatrical grosses since its Dec. 17 release. That’s just part of what makes Sony big enough to do what it needs to do, Yoshida said.
“If you look at Sony’s entire entertainment business, including games and music, it is approximately a $45 billion revenue company. It’s not huge, but it’s not subscale,” Yoshida said.
Key, Yoshida said, is Sony’s “Kando spirit,” making products that bring joy to your consumers. That Japanese concept, no surprise, goes back to the idea of trying to give grumpy consumers a better experience with their streaming services and the tech that delivers it.
He didn’t rule out making a deal for an established studio or library, though he was vague about plans there.
“I am interested in any opportunity to enhance our IP capability as well as our (direct-to-consumer) capability,” he said. “I don’t know if a current or incumbent studio is the right target. That is (SPE Chairman and CEO) Tony (Vinciquerra)’s call. But I really want to enhance our IP power as well as DTC power in the area of communities of interest.”
One example of a “community of interest” is the quintessentially Japanese art of anime, which has found an ardent global audience. Sony already had one anime service, Funimation, when it picked up WarnerMedia cast-off Crunchy Roll for nearly $1.2 billion a year ago.
Sony used CES to signal another big new entertainment opportunity, unveiling its first ever electric car and a new division called Sony Mobility. When concept cars like Sony’s moves arrive in the next couple of years, with self-driving capability, there’ll be a lot of demand for all those Sony movies and games when we head into work once a month.
In the short term, however, other questions still face Sony, especially the issue of scale amid what remains an entertainment ecosystem vexed by the lingering pandemic’s latest surge and a sense that virtually no one is well situated for the next phase of the streaming wars.
Other companies are prepping for a cloudier next few months. Disney, for instance, this week moved its latest Pixar animated family film, Turning Red, from a theatrical release to a streaming-first debut on Disney Plus beginning March 11. The strategy is similar to what it did with a couple of other backlogged Pixar projects, most notably two-time Oscar winner Soul.
“Given the delayed box-office recovery, particularly for family films, flexibility remains at the core of our distribution decisions as we prioritize delivering the unparalleled content of The Walt Disney Company to audiences around the world,” said Disney distribution czar Kareem Daniel.
Nobody has definitively figured out how to optimize their streaming vs. theatrical balance amid the pandemic’s flux, though at least some industry consensus seems to be emerging for the longer term. As Daniel’s quote suggests, for at least the first part of 2022, flexibility and opportunism may be the attitude everyone should take.
Amid all that, Sony might not be “subscale,”to use Yoshida’s term. But it’s not clear that Sony can scale up enough to stay that way. Maybe helping the entire ecosystem figure out how to infuse more Kando (and can-do) spirit into an industry that’s increasingly characterized by frustrated and annoyed customers can sustain. ■
