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The Strategical Success of Sony Pictures Entertainment

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The Sony Corporation is a conglomerate founded in 1946 as the Tokyo Telecommunications Engineering Corporation in Japan. It has since evolved into Sony, a company that produces electronics and entertainment content. Sony’s four main operating segments include Electronics, Sony Financial Services, Sony Music Entertainment, and Sony Pictures Entertainment. Sony Entertainment Inc is the parent company to both Sony Music Entertainment and Sony Pictures Entertainment which is a subsidiary of Sony Corporation. Sony promotes their purpose which is to, “Fill the world with emotion, through the power of creativity and technology”. Sony Corporation’s content distribution includes movies and television, music, and video games.

The movie division of Sony Pictures Entertainment is called Sony Motion Picture Group. Their organizations include Columbia Pictures, Tri-Star Pictures, Screen Gems, Sony Pictures Animation, Sony Pictures Classics, Sony Pictures Imageworks, Sony Pictures Home Entertainment and Sony Pictures Worldwide Acquisitions and releasing groups, Sony Pictures Releasing and Sony Pictures Releasing International5. Sony Pictures’ highest grossing worldwide box office release was Spider-man: Far From Home (2019) grossing $1,128,928,785 in the Worldwide Box office6. Coincidentally, there has been a lot of recent controversy following Sony’s highest grossing character, Spider-man. A previous deal was made where Sony could work with Disney (Marvel’s parent company) in partnership to produce the newest iteration of Spider-man films starring Tom Holland. However, the two conglomerates struggled to reach a financial agreement; this would end the franchise before the next film. Clearly, losing this character would be bad for Sony considering their highest grossing film was in this franchise. Fortunately, the dispute has cleared up with the very recent news that Disney and Sony will extend the partnership for one more Spider-man film set for release in July 2017.

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Sony Pictures’ most recent release was Quentin Tarentino’s Once Upon A Time In Hollywood (2019) which has a domestic total gross of $138,485,1508. Their upcoming films include Little Women which has a large profit potential due to a cast with star-power such as Emma Watson, Timothee Chalemet, and Meryl Streep as well as an established fanbase with supporters of the novel. They also include Jumanji The Next Level, releasing December 13, a sequel to its well performing predecessor, Jumanji: Welcome to the Jungle (2017). A Beautiful Day In The Neighborhood releasing on November 22, aided by the star-power of Tom Hanks. According to their first quarterly report of 2019, the film earnings increased to $3.7 million; the first time there was a first-quarter profit in that division in five years.

TV The television division of Sony Pictures Entertainment is called Sony Pictures Television. They have current and upcoming shows lined up for release. Season 3 of The Good Doctor premiered on September 23rd The Goldbergs season 7 premiered on September 25th on ABC. Shark Tank returns September 29th on ABC and The Blacklist returns October 4th on NBC. S.W.A.T., a new show from Sony Pictures Television premieres on October 2nd on CBS10. Its most popular show right now is The Boys (2019-) available on Amazon Prime Video that was released in July. Also in the Quarter 1 fiscal report, there were higher television licensing revenue for catalog titles.

According to the Sony Pictures Entertainment, Inc. profile, annual estimated sales are $434.78 million by the fiscal year end of December and their top competitors are Disney Studios, Universal Studios, and Warner Bros13. After publishing the first quarter results, the revenue projection was adjusted to show a nominal decrease, even though the overall profit estimate stayed the same. Sony’s corporate strategy meeting on May 21, 2019 showed a movie/tv segment initiative to achieve a strong competitive position with its advantages of a large content IP library, being an independent studio, and IP synergy with other Sony owned groups.

Sony Music Entertainment is the fourth largest recorded music company. They represent over 40 labels and have offices in over 40 countries16. Some of Sony Music’s featured artists include Beyonce, Chris Young, Justin Timberlake, and Elvis17. In August 2019, Sony Music’s recording division, Sony Music Entertainment, and their publishing division, Sony/ATV, merged under the same umbrella to become Sony Music Group. In the fiscal Q1 of 2019, Sony Music’s overall revenue was $1.82 billion. Physical revenue declined 2.7%, digital revenue increased 16.4%, download sales dropped 22.7%, and streaming revenue rose 21.5%. In the music division alone, there has been an 11% increase in sales. For music, the full-year forecast predicts revenues of $7.55 billion and operating profits of $1.22 billion. During their corporate strategy meeting on May 21, 2019 Sony revealed their music segment initiative; a steady increase of profit from a consistent license business model and a high market share.

On September 26, 2019, Sony held an ESG briefing where they discussed their goal to “generate sustainable social value from a long-term perspective”. Their mid-term strategy is focused on the value generated by that long-term perspective. They also appointed three new outside Directors and is increasing the number of meetings in order to improve the Board of Directors. Employee initiatives such as the “Symphony Plan” will be implemented to support employee challenges. Environmentally, Sony has a ‘Road to Zero’ environmental plan to reduce environmental footprint to zero by 2050 and the “One Blue Ocean Project” to reduce plastic waste pollution in the ocean.

The Sony Corporation (SNE) is a publicly traded stock and it has been steadily climbing upwards since April 2019. They are currently at a share price of 58.77 and their 52-week high is only slightly higher at 61.0224. At the May 2019 corporate strategy meeting, Sony’s President and CEO Kenichiro Yoshida said that Sony will continue to attempt to achieve synergy between its various segments and continue to evolve as a ‘creative entertainment company with a solid foundation of technology.

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