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[30] Sony Corporation Annual Report 1998
Message From Top Management
Last year, we began the transformation of Sony Pictures Entertainment (SPE). During the year under
review, we started to hit our stride in becoming a consistent global entertainment leader. Our motion
picture companies released a string of hit films that generated the best worldwide box office perfor-
mance in history. Now we are building on that momentum by reorganizing our motion picture busi-
ness to further increase production, efficiency and strategic focus, centralizing our motion picture
production under the Columbia banner. The Columbia lady, synonymous with nearly 75 years of cin-
ematic excitement, is a strong partner for Sony’s global marketing and technological brand name in
our commitment to create unique franchise films for audiences worldwide.
Our Television Group also achieved industry leadership by placing more shows on the U.S. net-
works than any other studio. We intensified our international growth strategies, expanding into local
motion picture production as well as creating branded television programming and other new produc-
tion and distribution platforms worldwide. And we coined a new SPE tag line that summarizes all of
these initiatives: “Lighting up screens around the world”—movie screens, television screens and
computer screens.
Record-Setting Motion Picture Performance
In the 1997 calendar year, the Columbia TriStar Motion Picture Group set all-time industry records by
grossing $1.27 billion at the U.S. box office and more than $2.3 billion worldwide. SPE’s success was
propelled by blockbuster hits such as Men in Black, the year’s top-grossing film worldwide and SPE’s
top-selling video release of all time, Air Force One, My Best Friend’s Wedding, and the critically ac-
claimed As Good As It Gets, which won two major Academy Awards®. SPE’s diverse portfolio of hits
also included The Fifth Element, Anaconda, and I Know What You Did Last Summer.
Revenue growth was further enhanced by Columbia TriStar Home Video, which achieved four of
the five top-selling direct-to-sales video releases in its history. SPE expanded its creative family by
forging major relationships with top talent, including producer/filmmakers Roland Emmerich and
Dean Devlin, writer Ron Bass and producer Sydney Pollack. SPE also implemented President John
Calley’s global motion picture production strategy by forming a local German motion picture company
as part of a long-term alliance in the German marketplace.
Television Maintains Leadership in Global Content Creation and Distribution
Columbia TriStar opened the 1997/98 television season as the only studio with a series on every
network and every night of the week. SPE’s television business continued its leadership in two other
valuable formats with the most popular game shows in the world, Wheel of Fortune and Jeopardy!,
and the top-rated daytime programs, The Young & the Restless and Days of Our Lives.
The long-term value of SPE’s programming distribution has been underscored by the unprec-
edented demand for the second syndication sales cycle of the blockbuster comedy Seinfeld. SPE also
reaffirmed its commitment to global leadership in content creation and distribution by joining with
Liberty Media Corporation in acquiring Telemundo Group, Inc., pending regulatory approval, to enter
the fast-growing Spanish-language marketplace in the United States and Latin America.
SPE already develops original programming in eight languages and during the year launched the
AXN branded channel, devoted to action/adventure programming, in Asia. SPE continued its commit-
ment to capitalizing on growth opportunities throughout the international marketplace for both
motion pictures and television, with more than 20 international channel ventures reaching over a
billion viewers around the globe. International revenues from licensing films and programming from
the studio’s library of more than 3,500 motion pictures and 40,000 television episodes have increased
72% during the past two years.
Theatre Operations
Loews Theatres added new locations and expanded existing locations to create a total of 91 new screens. Including
Loews Theatres, Sony Theatres, Magic Johnson Theatres, and Star Theatres, the Loews Theatres Exhibition Group oper-
ates 1,038 screens in 139 locations.
During the year, Loews Theatres agreed to merge with Cineplex Odeon Corporation forming one of the largest
theatrical exhibition companies in the world. The Loews Cineplex Entertainment Corporation will be a stand-alone
company with the potential to increase the value of the exhibition assets for Sony, with planned expansion for the
theatre circuit throughout the world. The new company will have over 2,700 screens with 425 locations in North America.
[ Pictures ]
John Calley
President and Chief
Executive Officer
Sony Pictures
Entertainment Inc.
Review of Operations