Into the SonyVerse (Part 1)
The future of Sony Pictures & Interactive Entertainment
Recently I watched Spiderman: Into the Spider-Verse.
Again. For the 5th time.
Here’s the Netflix link for if you haven’t watched it (it’s amazing). After I got done, I thought to myself - Why did I watch a Sony film on Netflix? Every other major studio has their own streaming service, does Sony have one? The quick answer is no. Sony did own Crackle but sold it. What should Sony do with its entertainment division? Here are three strategies that Sony executives can take for the future of Sony Pictures (spoiler the third one is better than the others).
Partner
Sell
Develop
Partner - License Content
This is what Sony Pictures currently does. They release their content in theaters and then license it to different streaming companies. Examples include Netflix with Spiderman and The Karate Kid on IMDbTV (honestly I have never watched anything on IMDbTV).
Pros. Sony executives don’t have to change any of their current model and continue to get cash from licensing agreements.
Cons.
The theatrical model, which is a core part of Sony's current approach, is changing rapidly. There are no current theatrical releases and no positive future in sight – AMC might go bankrupt, major film markets (US, UK, Brazil) cannot control the virus, and theaters keep pushing back reopening. Sony can’t rely on the current model.
A subsitute for theatrical release is OnDemand. Sony could release their movies at home and then license to others. While this is okay in the short term, Sony is essentially making movies for other studios, losing its brand image and power. Eventually it would either cease production or get bought by another studio for a low price.
Cons win. This leads to the next path forward.
Sell Entire Pictures Studio
Why wait to sell when it can sell right now? For those of you thinking - “Sony is the smallest of the big studios and why would another company want to buy it?” Let me remind you of these amazing hits by sony.
Honestly wouldn’t even be mad if this was true. Please Phil Lord/Chris Miller, make it happen. Here’s a real list –
Who would buy Sony?
Apple TV+
Apple’s streaming service announced with fanfare - beautiful black and white portraits of their collaborators against a backdrop ephemeral music. The actual product itself has been a resounding meh. While there are few things that Apple needs to do to fix it (user interface, have a stand alone website, confusing mix between purchased and subscription items) one huge problem is the lack of content. Subscribers don’t want to pay $5 a month for a few shows and movies. Even Apple knows this and started to license older movies/shows. Apple buying Sony would help build out their lack of content and Apple has the means to do it (over 100B). That could buy them 25 Lucasfilm Studio, 25 Marvel Studios, or 13 Pixar Animation Studios.
Netflix:
Netflix is a leader in the streaming world. While it has gained respect amongst filmmakers, buying Sony would put it up against the original studios like Disney (Disney+) and WarnerBrothers (HBOMax).
Sony catalogue also fits with Netflix as it already licenses many of their titles.
Also, Netflix doesn’t have a specific animation studio but has been buying (The Little Prince /Klaus) with plans for more. Sony Animation division could serve as its animation hub. (Animation is pandemic proof as seen by the large increase in animation productions.)
Others
Disney: Could gain Spiderman (yay), already owns everything else and would cannibalize their existing IP (sad).
Paramount (ViacomCBS) is going through a tough merger right now and is not in the best position to buy another large company (see tanked stock price).
ATT/TimeWarner and Amazon have the means to buy but are viewed already as monopolies and might be hard to get government support.
Pros. Selling now can bring in cash. It avoids a future where Sony pictures doesn't exist or it sells for much lower.
Cons. Sony doesn’t need cash immediately. It loses brand recognition for it's other subsidiaries (electronics/gaming). No potential future synergies between Sony Pictures & Sony Interactive.
While it might be attractive to sell, the cons outweigh the pros. Next.
Develop Streaming Service
Sony Pictures should co-develop a streaming service with its Interactive division. Sony Interactive already developed PSVideo and PSMusic which can form the base of its streaming service. This service should then integrate with Sony’s hardware like TV’s, projectors, mobile devices, and Playstation.
Pros: Gives Sony a future distribution for their movies/shows. Allows for greater integration amongst its subsidiaries.
Cons: Requires capital, leadership, and time.
On face value, the pros and cons here are relatively even. However, the integration of Sony Pictures and Interactive points to a bigger strategy. By doing this, Sony stating that it will adapt for to the future of media and have a stake in the Metaverse. A SonyVerse.
What is the Metaverse? Stay tuned for part 2 of this article which will focus on Sony’s part in the metaverse. In it we'll discuss the core layers of the metaverse and how Sony can have a stake in all 3. If you don’t know what the metaverse is, I suggest reading Matthew Ball’s article where he goes in depth describing the metaverse.
EDIT: Here’s part 2 of the article.
I’m going to start listing soundtracks that I’ve listened to in the past week. Here are my favorite soundtracks I listened to while writing this post!
Cloudy With a Chance of Meatballs - Composed by Mark Mothersbaugh
Spiderman Into the Spiderverse - Composed by Daniel Pemberton
Moneyball - Composed by Mychael Danna