Sony CEO says company taking serious look at entertainment spinoff
Sony President and Chief Executive Kazuo Hirai said his company is taking “a serious look†at a proposal from an activist investor to take part of the company’s entertainment business public.
“It’s something that’s been discussed at the board level, and discussed thoroughly,†said Hirai, who used the prominent platform of the All Things Digital technology conference in Rancho Palos Verdes to address some of the challenges confronting the company.
Hedge-fund investor Daniel Loeb, whose Third Point Capital owns about 6% of Sony, has urged an initial public offering for part of the company’s music and movie business. He has argued that such a move would generate capital to help revitalize Sony’s struggling electronics business, as well as unlock the value of the entertainment holdings.
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Sony has retained Morgan Stanley and Citigroup Inc. as it considers Loeb’s proposal, Bloomberg reported Thursday.
Hirai did offer a spirited defense of the synergies the company realizes from owning a film and television business -- and making televisions and other devices that rely on entertainment content.
“Different people use different standards to define the success of that relationship between content and hardware,†Hirai said. “I always like to point out ... the fact that we have a Blu-ray format, as opposed to some other [format], is because Sony was able to bring a lot of the content onto Blu-ray.â€
Sony, he said, will realize the same benefit as it introduces ultra-high-resolution 4K televisions to U.S. consumers. The first sets began selling in November, with new models just reaching stores in the U.S.
“As we launched the 4K sets in North America, we were able to provide a boxed set of 4K content pre-loaded on Day One,†Hirai said. “Which is something that’s uniquely Sony. Other manufacturers aren’t able to do that, because they just don’t have the content.â€
Hirai took over as chief executive of Sony in 2012, and is working to restore the company’s struggling electronics business to profitability. The Tokyo-based company posted its first annual profit in five years, thanks to dramatic belt-tightening and a weaker Japanese yen, which makes its products less expensive in global markets.
Sony’s television business continues to lose money, and even its digital camera and video business has been hurt as consumers snap photos and shoot video with their smartphones. The company is shifting its focus to smartphones, where it faces stiff competition from Samsung Electronics Co. and Apple Inc.
Hirai said he plans to revitalize the company’s core electronics business by bringing a sense of urgency and focus to the task of delivering products that will appeal to consumers. He said he believes that it’s possible to revive the “Sony DNA†that led to such revolutionary products as the PlayStation and Walkman.
“I fundamentally believe, with the proper focus, with the proper decision-making and with the proper execution, that the electronics business for Sony can turn around and really provide a compelling experience to consumers,†Hirai said.
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