Diversified, Japan (Public)
Digital Content Revenue
$3,383,000,000 (4% of total)
It never rains but it pours – and Sony has been caught in a perfect storm. Having lost the electronics innovation edge to Apple and Samsung, the behemoth has also struggled with the global downturn, currency fluctuations and natural disaster at home in Japan. It remains a diverse global entertainment powerhouse, manufacturing devices as well as the movies, TV shows and music to go through them. Its long-held ambitions of making this vertical integration coherent is now coming to pass through Music Unlimited and Video Unlimited.
Sony had to get its house in order in 2011, not least in digital content. The outfit bundled its PlayStation Network, Music Unlimited and Video Unlimited services together as Qriocity – a name nobody understood. Then PSN suffered weeks of outage after a hack attack and Sony renamed Qriocity as Sony Entertainment Network. One of its big ideas for uniting content and hardware, its tablet line-up, made no impact.
New CEO Kazuo Hirai forecast online content services sales of 300 billion yen ($3.8 billion) for fiscal 2012. Within that, PlayStation Network alone was already pulling in 36 billion yen ($450 million) in 2009. That PSN revenue doubled in 2010, according to Reuters (estimated total 72 billion yen, $907 million) and reportedly rose a further 14 percent thanks to measures Sony took after the hack attack (estimated total 82 billion yen, $1 billion. But even adding nascent online music and video services (now called Sony Entertainment Network) to the games services leaves a big gap to Hirai’s target. The Sony Music Entertainment label does not break out earnings from digital music sales and licensing, but applying the global industry-standard ratio of 32 percent to the label’s $5.4bn total 2012 revenue yields $1.728 billion. The Sony Pictures Entertainment studio does not break out earnings from online movie sales and rentals, but we estimate this at eight percent of the studio’s 656 billion yen ($8.2 million) 2012 fiscal revenue – $655 million.
Source: Q4 2012
Source: Q4 2012