Sony Aims for Jump in Movie, TV Revenue Over 3 Years

Japan's Sony Corp said it is aiming to lift its movie and TV revenue by more than a third in the next three years as it cuts costs and invests in potential hit films, including a new Spider-Man movie.

Loss-making Sony has been under pressure to show its entertainment business can be a stronger contributor to growth after rejecting last year a proposal by U.S. hedge fund Third Point to spin off the segment, and as its mobile division flounders.

Sony Pictures Entertainment aims to garner between $10 billion (roughly Rs. 61,734 crores) to $11 billion (roughly Rs. 67,900 crores) in the financial year ending in March 2018, an increase of as much as 36 percent over the $8.1 billion (roughly Rs. 50,000 crores) forecast for this business year.

Sony Pictures Entertainment's recent box office hits include "The Amazing Spider-Man", while its popular television production titles include "Breaking Bad".

"We are creating, acquiring and distributing the best content across our lines of businesses and around the world," Sony Entertainment CEO Michael Lynton told an investors' conference.

Lynton added that the segment is set to realise $300 million (roughly Rs. 1,852 crores) in annual cost savings by the end of March 2016.

It would target an operating profit margin between 7 percent and 8 percent in the year ending March 2018, up from the 6.6 percent forecast for this business year, he said.

Sony also said it is aiming for revenue of $4.8 billion to $5.2 billion (roughly Rs. 32,100 crores) from its music division in three years time, which compares with a forecast of $4.8 billion (roughly Rs. 29,632 crores) for the current financial year.

The company's shares rose 4.6 percent to 2,436 yen by early afternoon trade, while the Nikkei stock market average rose 1.9 percent.

Last month, Sony posted a smaller-than-expected second-quarter operating loss, hailed by its finance chief as proof that the Japanese group's restructuring programme is paying off. The firm said however that its mobile division is heading for a 204 billion JPY (roughly Rs. 10,800 crores) loss this financial year.

Sony Chief Executive Kazuo Hirai, who was appointed in 2012 and is facing pressure after the company suspended dividends for the first time since going public, told the conference that he plans to set mid-term growth targets for the whole company before the end of March.

© Thomson Reuters 2014