Sony Corp. CEO Says There's Been Increased "Urgency" to Boost Film Unit Profits
Profitability is below forecasts, acknowledged CEO Kaz Hirai, but he reiterated, "Pictures remains an important business for Sony."
Sony Corp. CEO Kaz Hirai said there was increased urgency for profitability from movies, but again emphasized the company's commitment to its pictures unit at a corporate strategy meeting at its Tokyo headquarters on Tuesday.
Speculation that the Japanese conglomerate could be looking to sell Sony Pictures Entertainment (SPE) has continued after the recent appointment of Tony Vinciquerra as its new CEO, though Hirai has repeatedly stated his commitment to the struggling unit.
Hirai acknowledged that the profit forecast for the current fiscal year to March 2018 is "is significantly below the original target set in the mid-range plan" but maintained, "Pictures remains an important business for Sony."
"Inside the Pictures business, the level of urgency with which measures are being implemented to improve the profitability of the motion pictures business has increased. Due to the nature of the business model for motion pictures, it takes time for results to improve, but Sony is aiming to transform this business into one that generates a high level of profit," added Hirai.
"I've spent a lot of time at the studio recently, and the level of motivation among staff is very high, they love working at Sony Pictures. Tony is a team builder and a people person," said Hirai in reply to a question about turning the Pictures division around.
"Tony's management style is very similar to mine in terms of capturing the hearts of employees," replied Hirai to a question about why he chose Vinciquerra, adding that the new CEO also met with other Sony senior executives, including CFO Kenichiro Yoshida, who were involved in the final decision.
Sony Corp. is forecasting overall operating income of ￥500 billion ($4.5 billion at current exchange rates) for the current year, of which the pictures division is set to contribute just ￥39 billion ($350 million), or less than 8 percent. By way of comparison, the music segment is forecast to generate more than double that amount, and the game unit, led by the success of the PlayStation 4, more than four times as much.
Vinciquerra takes over as CEO of SPE on June 1, and the division will be represented by CFO Philip Rowley at the investor relations event to be held after the strategy meeting.