The entertainment industry is increasingly appealing to the big tech companies. After Amazon and Apple’s foray into streaming content, it is now Sony, from the other side of the planet, that is making a strong commitment to its own creative content. They all want to steal Netflix’s cake, seeing the success of its commitment to on-demand content that has everyone mesmerized in front of the screen.
Under Kenichiro Yoshida’s leadership, the electronics group has shifted to become a global entertainment firm, moving away from its early days as a digital device manufacturer when it tried its hand at making radios and transistors in Tokyo in the 1940s.
Since 1946, Sony has undoubtedly become an icon of electronics, manufacturing televisions, radios and the popular PlayStation video game console. It has no intention of abandoning hardware, but is now putting it on the back burner, betting heavily on its own content.
Until now, the strategy was to buy third-party content, which is why it already has a large anime catalog.
According to an official document summarizing its strategy, the company has invested around 8.2 billion euros (1.3 trillion yen) in the last six years to expand its portfolio of own content. It has mainly used the money to acquire companies, including the purchase in 2021 of the Crunchyroll platform, a benchmark in the consumption of anime audiovisual content, the genre so characteristic of Japanese cartoons.
According to its latest available accounts for the 2023 financial year, the company is achieving its goal of becoming an entertainment group. In the document, it states that 60% of revenue comes from entertainment services: mainly from video games and, to a lesser extent, from films, series and music. Only 40% of total revenue (which was around 75 billion euros) comes from the traditional electronics business. However, these percentages are still not optimal for the group. In an interview given this week to the Financial Times Yochida says that “Sony has a problem, it lacks control over the initial phase of intellectual property rights (IP).” These statements mean that the company wants to focus on creating its own content, stopping buying content from third parties or at least doing so to a lesser extent.
He has already started working on it, bringing it to the big screen Uncharted inspired by a video game, and launching the series on television The Last of Us also inspired by a PlayStation game. The company has budgeted millions to become a leading player in content creation and, in this regard, is willing to sign the best global talent.
Founded in 1946 in Tokyo, the group began by manufacturing radios; now electronics only contribute 40%
The commitment to cinema – which comes from afar, with the production of titles such as Spider-man, Jumanji o Black Men Sony’s move to the cinemas – and the purchase of Columbia Pictures – has also spread to the cinemas. A few months ago, Sony acquired the Alamo cinema chain, which is very popular in the United States. Despite this approach to the audiovisual industry, Sony does not want to operate exactly like Netflix, that is, with an international platform that interacts directly with the consumer. Rather, the Japanese group wants to sell its own content to different platforms with the aim of obtaining the best possible margin. Therefore, competition with Netflix (and other large platforms) would occur when it comes to broadcasting its own programmes, since these large platforms are also betting heavily on creating their own content. Thus, the multinational wants to work to control the entire production chain, and get a greater profit from it, since until now, it acquired this content from third parties and then distributed it to the large platforms.
According to market research firm Ampere Analysis, this big bet puts Sony alongside Netflix, Apple and Amazon in the spending war for its own content, a battle that is expected to mobilize an investment of 220 billion dollars this year.
