Sony CFO: Without a Streaming Platform, We’re Free to Sell Films and Shows “to the Highest Bidder”
Sony Group Corp. CFO Hiroki Totoki, who is set to succeed Kenichiro Yoshida as group president on April 1, outlined his evolving corporate strategy for the Japanese tech and entertainment giant on Monday.
“I’m very much obsessed with growth. It’s very important for any company to get growth to maintain people’s motivation and maintain the customer,” Totoki told the Morgan Stanley Technology, Media & Telecom Conference.
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He added that, as Sony’s financial chief, “I always take care of two key metrics. Number one is growth and number two is the profit margin. And, as a CFO, I always focused on these two important metrics. If they go in the right way, the other metrics will take care of themselves. And that’s my simple philosophy.”
As Totoki takes on new duties as Sony’s global operations overseer, including COO, at the beginning of the next fiscal year, Yoshida will remain CEO and chairman of Sony Corp. The pair have worked closely together at Sony Bank and Sony Network Communications.
For the Sony Pictures Entertainment division, Totoki reiterated to the investors conference that the Hollywood film and TV studio is “subscale” in comparison to rival media players like Disney and Warner Bros. Discovery. But he added that Sony Pictures remains a key driver of earnings for the conglomerate as it doesn’t have a costly streaming platform to get off the ground and feed with content.
“That’s why we can sell our video streaming content to the highest bidder” as a strategic supplier to streaming giants, Totoki argued. He also pointed to Sony Pictures Network India merging with Zee to create a broadcast giant in that Asian market for greater scale.
“This merger is largely complimentary because Sony Pictures India has strengths in general entertainment and sports product programming in Hindi, and Zee has strengths in entertainment with local languages,” Totoki said.
Sony Pictures’ operating income for its recent third quarter fell to $179 million, down 86 percent from $1.31 billion in the same period of the previous year, as the studio was hit by the lack of major theatrical hits and lower revenue from TV licensing.
Totoki touted upcoming movies titles like Gran Turismo, the success of Sony Pictures Television’s The Last of Us for HBO and another ten projects at the film and TV studio that similarly has gaming IP and are ripe for adaptations on other media platforms.
The Sony Corp. exec said his gaming division, a key earnings driver for the media giant, will be able to finally meet pent-up demand for PlayStation 5 consoles after overcoming supply chain and logistical issues, which includes semiconductor chip shortages. “There’s good, strong demand for PS5 and we are pretty much sure over the next fiscal year we can catch up” by making enough PlayStation 5 consoles to meet market demand, he told the investors conference.
He added PlayStation 4 users were positioned to upgrade to PlayStation 5 consoles, which are key to driving profits for the gaming division.
On the music side, Totoki said Sony would be looking to grow its music streaming business, do more to grow in emerging markets, including Mexico and Brazil, and drive earnings growth from rising subscription prices at Amazon Music and other music streaming sites.
“We see many emerging platforms, including sports and social media,” to license music product to, the executive added.
