Sony Pictures Ideally Placed for Post-Pandemic Profitability, CEO Says

“Being an ‘arms dealer’ has benefited us tremendously,” Tony Vinciquerra says

Sony Pictures Entertainment Tony Vinciquerra
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Not having an SVOD streaming service puts Sony Pictures in the ideal position as an “arms dealer” to powerful streamers such as Disney and Netflix, said Sony Pictures CEO and chairman Tony Vinciquerra on Monday during a fireside chat at the Bank of America 2021 Media, Communications & Entertainment Conference.

“That’s one of the things that a huge advantage for us at Sony Pictures where we don’t have a general entertainment as a service, we are, for lack of a better term, an arms dealer and selling to everybody and it’s benefited us tremendously to this point, and we now have much more flexibility in how we distribute our films,” Vinciquerra said.

In a conversation moderated by Jessic Reif Erlich, managing director BofA Securities, Vinciquerra said that Sony’s primary emphasis would remain the theatrical film business but touted the the studio’s library as a valuable asset. He called Sony Pictures one of few significant studios that “has a big library (plus) the ability to put a lot of films into theaters that will be in the library soon.”

Not surprisingly, Vinciquerra cited Sony’s recent major content deal with Sony and Disney as an example of the company’s ability to be nimble in monetizing its content. He added that Sony still plans to have an output of 12 to 15 theatrical releases per year. However, he added that the streaming market means that the “bar has been raised” in terms of which films will go directly to theaters, although “you will still see our major films going directly to theaters.”

The executive added however that Sony is capable of producing “far more than 12 to 15 (films) each year” so look for Sony to be selling more films directly to streamers in the future. “The pandemic … has changed things some — not totally but some,” he said. He added that he does foresee the continuation of shorter windows between theatrical and streaming releases, with 45 to 60 days likely to remain the norm.

He said that Sony’s massive TV library has become a “fabulous” asset during the pandemic. “These SVOD series need lots of product,” he said.

Vinciquerra also was asked to address something that has been an elephant in the room for studios since the Scarlett Johansson lawsuit against Disney over its streaming release of “Black Widow:”: Compensating talent.

“You know, we don’t know the story there yet, it appears that they were unable to come to terms on what that film might have done if it were only theatrical,” Vinciquerra said. “It was released in a time period where theaters were not in the best of shape although it did pretty well the first weekend. So there has to be an agreement on these older contracts that didn’t anticipate or didn’t foresee what was going on in the world, but you’ll see that changes as the new deals are made…So, you know, it will adjust.”

In an early August earnings call, Sony executive deputy president and CFO Hiroki Totoki said the company’s pictures division, which includes film, network and TV production, saw profits of $231 million compared to $245 million in Q1 2020. The increase in advertising ad subscription revenues was offset by decreased sales to home entertainment because of fewer theatrical releases in 2020, as well as lower licensing revenues from TV productions.

Totoki said that while music is booming and theatrical box office has improved in recent months, movie attendance has not completely recovered and new COVID surges are complicating projections for the rest of fiscal 2021 and beyond. He said Sony is still feeling the longterm effects of pandemic shutdowns in TV and movie production.

In April, the Walt Disney Company and Sony Pictures announced a multiyear content licensing agreement for U.S. streaming and TV rights to Sony Pictures’ new theatrical releases across Disney Media & Entertainment Distribution’s vast portfolio of platforms including its streaming services Disney+ and Hulu, as well as linear entertainment networks including ABC, Disney Channels, Freeform, FX and National Geographic. 

The deal covers theatrical releases from 2022-2026 and begins for each film following its Pay 1 TV window. The agreement builds upon the companies’ prior arrangement which saw SPE movies licensed to FX in the post-Pay 1 TV window.

The deal also grants rights to a significant number of SPE’s iconic library titles, ranging from the “Jumanji” and “Hotel Transylvania” franchises to Sony Pictures’ Universe of Marvel Characters films, including Spider-Man. This gives Disney enormous programming potential across its platforms and makes them key destinations for a robust collection of Spider-Man films. Notably, the agreement provides Hulu access to a significant number of library titles beginning as early as this June.


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