Sony is different things to different folks – for some, they’re the company who makes their TV while to others, they are the makers of their previous laptop. But more and more, especially this last decade, Sony has become an entertainment company with PlayStation and Sony Pictures being big drivers of profits and growth. However, in the last few years, Sony Pictures has been dragging compared to the past, leading them to cut out a deal with Marvel which now has creative control over Spider-Man films. Interestingly, that might have just been a sign of things to come with Sony now mulling over the merger of Sony Pictures Entertainment and Sony Interactive Entertainment.
Rachel Aldrich writes for TheStreet:
Sony Pictures Entertainment is part of Sony Entertainment, which also owns Sony Music Group and music publisher Sony/ATV, which could be merged and stand alone if the film arm and Sony Interactive Entertainment combine, sources told the Post.
The potential move would place Sony Pictures Entertainment underneath the watchful eye of Sony Interactive Entertainment’s CEO, Andrew House, the sources noted, although it’s unlikely House would take over the day-to-day operations of the studio. The company will make a final decision on the merger by the end of its fiscal year in March, sources added.
When I went to bed reading the news, it first sounded ludicrous but the more I think about it, the more it makes sense. One of the problems Sony has faced is the different silos it has and how little each division actually works with each other. Why else do you think Sony, a company which ships hundreds of millions of electronic devices a year, has never been able to get a movie or music streaming service off the ground despite owning a large film and music studio?
On the other end of the spectrum is Apple which has to negotiate every deal and is able to be a key player in entertainment and that’s because the iTunes division, under Eddy Cue, is an integral part of Apple. Every device that ships from the Mac to iPhone and Apple TV with Siri heavily uses iTunes and, in the case of Apple TV, iTunes is a core component of it. That means that from the ground up, the ‘entertainment’ side of Apple and the hardware/software division are working together to create something.
For Sony, a service like Qriocity, later Music Unlimited and eventually Movies Unlimited, was created as a separate service, then pitched to the hardware team (hence the reason why it would work on some Sony hardware and not others), and eventually when ready, was negotiated with each movie/music studio for rights to their content, including those owned by Sony.
With Sony Pictures and Sony Music coming in house under Sony Interactive Entertainment, Andrew House can build the future of PlayStation which is all about streaming. Regular readers will know that I’ve long championed for the future of PlayStation to be a cloud-based platform only and Sony sees that as well or they wouldn’t have excluded a 4K Blu-ray drive from PS4 Pro. But seeing how they see streaming services as the future and are building up their internal arsenal with services like PS Vue and PS Now, it makes sense for them to also have their entertainment content close by in order to better integrate them – I’m especially looking at you, PS Vue.
The less bureaucracy at Sony and the more collaboration from inception between hardware, software, and services, the better Sony/PlayStation can compete and bring compelling new products to market. Does the move make sense to you?