The ongoing war in the Ukraine, geopolitics in China, and last summer’s Hollywood labor strikes — not consumer interest in theatrical movies — have resulted in a downturn in the production of new movies and TV shows across all distribution channels, including streaming video, Tony Vinciquerra, chairperson of Sony Pictures Entertainment, said on Sony Corp.’s business segment meeting.
Vinciquerra said the combination of the aforementioned events and the pandemic has resulted in few theatrical releases and content choices for moviegoers. He was quick to downplay naysayers who are forecasting the demise of the theatrical business, contending instead that as bigger budget productions return to the big screen this summer, consumers will follow.
“What really is happening is that people got out of the habit of going to movie theaters,” Vinciquerra said. “In the second half of this year, you are going to see quite a resurgence of people going to theaters. It may not get back to the pre-pandemic level, but we’re pretty optimistic about the next couple of years.”
Vinciquerra reiterated Sony’s decision not to launch a branded general entertainment SVOD/AVOD platform in the U.S., which would appear to negate any interest the studio might have in the Paramount+ streaming platform should Sony and Apollo Capital acquire Paramount Global.
“We’re not going to get into other businesses. We’re not going to get into general entertainment streaming services. We’re not going to be operating other businesses outside of the strategies we have defined,” he said.
Vinciquerra said U.S. streaming platforms have downsized content spending with higher episodic program cancelations. Industrywide new TV series orders dropped 22% to 951 shows in 2023 from 1,221 programs in 2022.
Total direct-to-consumer streaming content spending among Disney+, Peacock, Max and Paramount+ dropped almost 30% to $6.8 billion in 2023 compared with $9.8 billion in 2022, according to Sony.
“As the industry’s leading independent content supplier, these changes are, of course, relevant to us at Sony Pictures. Clearly, it is a very challenging time,” Vinciquerra said.
In China, he said the percentage of combined U.S. studio movie revenue has declined from $3.3 billion in 2019 to $1.2 billion in 2023.
“China has started to allow more U.S. films, but the U.S. film share of the China box office has dropped by about 43% in 2019 to 16% in 2023,” Vinciquerra said. “And Russia, once a major marketplace for U.S. studio content, is obviously now non-existent.”
The executive contends that Sony’s decision not to “jump into” the crowded general entertainment streaming space with a branded platform, has enabled the studio to focus on its IP and content licensing rather than distribution.
Sony’s lone branded streaming platform, the anime-based Crunchyroll has more than 13 million paid subscribers.
Indeed, in addition to exclusive license agreements with Netflix and Disney+ for Sony Pictures theatrical releases, the studio produced Ridley Scott’s Napoleon for Apple TV+ and theatrical. That deal also includes the future theatrical releases Wolfs, starring Brad Pitt, Amy Ryan and George Clooney, Fly Me to the Moon, starring Scarlett Johansson and Channing Tatum, and the current “Dark Matter” TV show starring Jennifer Conolly and Joel Edgerton.
Sony Pictures Television, which created “Cobra Kai,” “The Night Agent,” “Who is Erin Carter,” and “The Crown” for Netflix, “The Last of Us,” for Max, will also produce the first animated TV series, “Spider-Man Noir” featuring the voice of Nicolas Cage, as part of multi-content deal with Prime Video that also includes “The Boys”.
