Sony Executive Talks Early Digital Film Releases, Netflix, Future of Music
NEW YORK - Sony Corp. of America executive vp and CFO Rob Wiesenthal told the UBS Global Media and Communications Conference here on Tuesday that film studios should continue to experiment with early digital releases like Sony did with Bad Teacher and that the music company of the future will work more like a music publishing than a recorded music firm.
He also discussed the state of Netflix and once again said that Sony's consumer electronics and content businesses are starting to gel.
Asked about the film business and windowing, Wiesenthal said that Bad Teacher saw digital sales rise 25 percent, and the studio noticed "no cannibalization" on physical sales when it started selling the film via digital outlets like iTunes two weeks before the title was available for purchase or rental elsewhere.
He suggested that the film industry needs to be aggressive in this field, arguing that one must be willing to innovate and break some glass to innovate and reap benefits. He also predicted that the industry would "see theater chains starting to participate in this [digital] chain," for example via exhibitors' loyalty programs that could send consumers to digital offers.
Asked about Netflix and its role in the industry, Wiesenthal called the online streaming firm "a viable distribution medium" and a company that has provided a "tremendous amount of innovation" in such areas as user interface, discovery and curation of content. And he pointed out that Sony has featured Netflix service on many of its devices, because it is a "very valuable service," especially for older and library films.
But he said Netflix's recent stock and other challenges are signs of a "recalibration of the value balance between content and aggregation." Wiesenthal also highlighted that when the Oscars are handed out early next year, Sony and other studios and talent working with the studios will be honored. "I don't think you're going to see anybody up there from iTunes or Netflix," he added.
Discussing the music business, Wiesenthal said that the music company of the future will look "much more like a music publishing company" than a recorded music company. In that context, he highlighted that only 20 percent of music publishing revenue is tied to CDs and intellectual property is licensed everywhere. Asked about online music video venture Vevo, of which Sony is a part owner, he said it is "worth a fortune."
Wiesenthal also emphasized that Sony remains committed to owning content and consumer electronics businesses. "This integration never made more sense," he said. The conglomerate is increasingly maximizing the value of having a hand in both sides of the business. "It's a battleship, but it's moving" and starting to really work, he said.
Last year, he had said that thanks to the likes of Sony's Music Unlimited service, the company for the first time has an opportunity to have a relationship with consumers after they buy a TV set, Blu-ray player or other connected devices. He reiterated a comment he made at last year's UBS conference where he had said he doesn't know how big the revenue opportunity was. On Tuesday, he said that whether Sony ends up making $1 or $10 a month for each connected device, it will be more than in past, namely zero.
How does the PlayStation fit into Sony? The console games business has "incredible" demos and is "a tremendous business," Wiesenthal said.
Asked what he views as key trends in the entertainment tech space, he mentioned the tandem use of TVs and tablet computers and technology that allows consumers to send audio and video from their tablets to the TV screen. He also cited a continuing shift from an ownership model to access.