Sony: We're making connections

CFO sees better collaboration under Stringer reforms

Sony Corp. has increased and improved collaboration across its entertainment and other businesses as reform plans introduced last year by chairman and CEO Howard Stringer remain on track or ahead of plan, Sony Corp. of America chief financial officer Rob Wiesenthal said Thursday.

Speaking at the Credit Suisse Media and Telecom Week conference, he said Sony can boost the profit margins at its film operations from the high-single-digit percentage to 10%.

He further signaled that the conglomerate would be willing to buy out Bertelsmann AG from its Sony BMG joint venture down the line and could look at spinning off its entertainment operations if its stock price doesn't appreciate further.

"Our core focus is the revitalization of our electronics business now," which should boost Sony's still-undervalued shares, Wiesenthal said when asked about a possible entertainment unit spinoff that has been suggested. "If there is no stock reward, we'd then look at other options."

Asked about Sony BMG, the executive said the relationship with Bertelsmann is solid again after a management reshuffle this year. While there are no plans for such a move, he said Sony would consider taking "their half" of the venture in a couple of years when such options kick in.

Wiesenthal also said Thursday that he is bullish on the PlayStation 3 console despite early challenges. "This is not a battle that will be won this Christmas season," he said. He added that the PS3 is only "starting out as a game machine, but the potential is much greater." For example, consumers will soon be able to buy music and films via the PS3, he said.

As an example of the improved collaboration across Sony divisions, Wiesenthal mentioned the product placement in and cross-promotion of "Casino Royale." He also said that the technology of recently acquired video-sharing site Grouper will be packaged with certain Sony devices in the future "to allow people to share content." He didn't provide specifics.

He said that overall, "Sony is a big ship" with cultural and organizational challenges. "We are happy with the progress, but we are not really done yet," he said in reference to Stringer's reform plans.

He also said the company's 2007 film slate looks strong thanks to "Spider-Man 3" and other key releases.

In other conference news Thursday:

Bucking a downward trend Thursday on Wall Street were XM Satellite Radio and Sirius Satellite Radio.

At the Credit Suisse conference, XM chairman Gary Parsons seemingly warmed to the idea of someday merging XM with Sirius, an event he predicted would pass muster with federal regulators who fret about monopolies.

"We are operating in a much larger marketplace than satellite radio. … The competition is predominantly terrestrial radio," Parsons said. He added that there is no urgency as XM is doing fine on its own, as is Sirius, he said.

Shares of TiVo Inc., which started Thursday trading higher, slid as CEO Tom Rogers spoke at the UBS conference. They finished down 4.8% on the day at $5.32. Their 4.8% loss led the decliners on The Hollywood Reporter's Showbiz 50 index.

Rogers reminded analysts that DirecTV would no longer market TiVo to its subscribers after February, though TiVo and DirecTV have a relationship through February 2010.

The CEO positioned the lack of marketing as a good thing, suggesting that having DirecTV trying to sell TiVo to its subs has somehow hurt TiVo's efforts to strike new relationships with cable TV operators.

Rogers stressed during his presentation what he thinks are the three biggest trends in TV: the proliferation of DVRs in households; the fast-forwarding through TV shows that DVRs facilitate; and the ongoing efforts to put video made for the Internet on TV screens. He said TiVo is uniquely positioned to benefit from all three.

NTL Inc. CEO Stephen Burch told the Credit Suisse gathering that his cable company is looking for video-on-demand content-deal opportunities in talks with broadcaster ITV Plc., a bid for which NTL dropped this week, and other content players. "We're not in a deal frenzy," he said when asked whether NTL was aggressively looking to buy some other company.

He also discussed the role of biggest shareholder Richard Branson, saying, "Everybody thinks he runs the company," even though that is not the case. "But we'll take advantage of that," Burch added, noting that Branson's name and visibility will be used in a campaign early next year to promote a planned name change of the company to Virgin Media.

Paul Bond in Los Angeles contributed to this report.