With the slew of award shows that happened recently, media companies have been thrust in the limelight, especially in terms of their success in content on film and TV. Sony Corporation (SNE ) posted close to 1 billion dollars loss in its third quarter, writing off the loss as an impairment loss under its operating financial figures. Variety reports that in Sony's recent filing, "The downward revision was primarily due to a lowering of previous expectations regarding the home entertainment business, mainly driven by an acceleration of market decline. Underlying profitability projections of film performance were also reduced, but the adverse impact of that reduction is expected to be largely mitigated by measures that have been identified to improve the profitability of the Motion Pictures business."
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Amongst the other studios, Sony Corporation failed to deliver quality content, ranking fifth compared to other major Hollywood studios with Walt Disney studios (DIS ) dominating the market. Several of Sony studio's anticipated movies, including Ghostbusters, The Magnificent Seven, and Passengers, performed poorly in box office sales, leaving Sony without much choice except to write down its movie business. With the head of the film division, Michael Lynton, leaving for Snap Inc. and rumors of the sale of its movie business, the company has cut its profit forecast. The Standard Examiner shares that "the loss in films is being taken extremely seriously by management" stated by CFO Kenichiro Yoshida in a recent briefing. The timing has not worked out for Sony. About three months ago, the company posted a profit cut by 25% with its agreement to sell its suffering batteries business. With the double hit, first with its batteries business and now its movie division, the company must bounce back from its 2016 losses.
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Despite the earnings outlook cuts, Sony Corporation is focusing on fiscal year 2017 as CEO Kazuo Hirai shares his enthusiasm for 2017 releases, which include Smurfs: The Lost Village, Jumanji, and the highly anticipated movies, Spiderman: Homecoming and Dark Tower. The studio is also looking to retain rights to the James Bond series that have been quite lucrative for its studio; yet there has been no new information on the renewing of contract since the release of Spectre in 2015. Besides its movie business, according to the Wall Street Journal, Sony's "television business has been much healthier, generating the majority of of Sony Pictures Entertainment's profit." It is not all bad news for Sony, as the company upgraded its full-year operating profit outlook in its semiconductors business, and now the hope is its movie business will deliver in the upcoming months.
