Monday, February 6, 2017

Sony Writes Down $1bn in Entertainment

Alternative Tentacles - Home Taping is Killing Music
Home Taping is Killing Music
Assuring everyone that they are still committed to the industry, Sony took a $962mn write down on entertainment. This is just prior to Sony Pictures Entertainment head, Michael Lynton, stepping down - so this probably has more to do with corporate restructuring than anything else. But, even if that is the case, it evidences Sony Pictures Entertainment's insecurity regarding the future of the field.

Sony said the reasons for the write down included declining sales in DVD and home entertainment. It also stopped valuing "goodwill" items, such as branding - valuing only hard assets instead. I have been telling you for years now that this "branding" bullshit was a fad! Sure, you need to sell yourself - and companies need to be recognizable - but all this "build your brand" claptrap was invented by marketers, and hyped by agents and managers. It's short-term consideration at best, and chasing the market at worst. It reminds me of the boy bands of the '90s - you can be the "fat one," fatties!

If Sony is facing a decline in home entertainment sales - which may include items like TVs and DVD players (if not considered "hard assets"), but specifically includes streaming rentals - they have only themselves to blame. Studios, and Hollywood in general, have been defiant in the face of streaming delivery's growth - insisting on continuing to produce and promote DVD and Blu-Ray releases, and sticking to the same models they employed prior to the advent of YouTube and Roku. You can pick up DVD/Blu-Ray releases for less than $1.00 in most department stores - including new releases!

Most of this has to do with existing contracts, but let's not discount politics and favoritism. Recording executives responded to dual cassette decks and Napster the same way (albeit far more aggressively and litigiously) - to the detriment of the entire music industry.

So, if my dire warnings sounded like Chicken Little in times past, Sony Pictures Entertainment's $1bn re-evaluation is your wake-up call.

© C Harris Lynn DBA The Weirding, 2017

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