You can learn a lot about a company by watching what assets it buys and what assets it sells. Sony Pictures Entertainment has been busy over the past four and a half years with a steady stream of deal activity.
Most of the transactions haven’t made big headlines because they haven’t involved big dollars compared with megabucks media mergers and acquisitions of late. But they have been signposts of how the company has positioned itself for the future under the direction of Tony Vinciquerra, who took the reins as chairman and CEO in mid-2017.
On the latest episode of Variety podcast “Strictly Business,” the CEO explains how it became clear to him that the move to streaming and on-demand platforms would reshape the entertainment economy.
“We had hundreds of individual businesses here — many of them losing money— with no hope of ever being profitable or being a significant part of the company,” Vinciquerra says. “When you’re running a company of this size and stature, it’s important to get people focused on what they can build. Our people were spending time and effort and resources on trying to fix these businesses that were unfixable.”
Over the past few years, Sony has sold off some of its international channel holdings— outlets in the U.K., Eastern Europe and Asia — in batches to private investor groups. It sold off the ad-supported streamer Crackle and the GSN Games unit that developed games for mobile and social media.
During that same time frame, Sony has acquired anime streaming service Crunchyroll, producer Jane Tranter’s Bad Wolf Entertainment and the studio is deep in negotiations to acquire India’s Zee Entertainment.
Generally speaking, Sony is less in the market for distribution assets and more focused on generating content. Its branded channels in Asia, for example, licensed most of their programming. Crunchyroll, which will be integrated with Sony’s existing Funimation unit, is an established anime distributor that also creates its own content.
Anime is an example of Sony investing in what Vinciquerra calls “communities of interest,” or niche markets that lend themselves to fervent fan interest that itself can be monetized. That approach has worked well on the film side of Sony Pictures’ Culver City lot, where a focus on franchises has helped bring the unit to profitability. “Jumanji,” “Ghostbusters” and “Spider-Man” are examples of “universes” that will be thoroughly explored through sequels and spin-offs.
“First we had to get the dysfunctionality out of the film business that was here for so many years,” Vinciquerra says. Under motion picture group leader Tom Rothman, the studio has pared down its roster of producer deals in favor of commitments with “people we know are going to be productive,” he adds.
Vinciquerra has deep experience in TV as a station group leader and longtime Fox Networks Group topper. He’s the first to admit that the shakeout in TV for the studio’s lucrative series production business is hardly complete. Sony is finding its way as the sector shifts to one driven by the total volume of shows rather than a big syndication score. To wit, Vinciquerra points to the profit potential of Sony Pictures TV’s ABC drama series “The Good Doctor,” now in its fifth season.
“’The Good Doctor’ is a very good show, but it’s not the home run it might have been 10 years ago,” he says.
No discussion of recent events at Sony Pictures wouldn’t be complete without a mention of the regime change at “Jeopardy” that stirred so much drama earlier this year. Vinciquerra declines to go into details regarding the short-lived tenure of Mike Richards as host of the game show. Richards’ four-day stint ended after old podcast episodes in which he made sexist and sophomoric remarks resurfaced.
The podcast was unwelcome news that eluded Sony’s background research on Richards. But Vinciquerra makes no apologies for supporting the selection of the host based on the information he had at the time.
“Absent knowing that, I would have made the same decision, because he was the guy who tested best,” he says.