Sony 2004 Annual Report Download - page 50

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48
Capitalizing on the strength of Sony’s core
assets – content and devices – the entertain-
ment businesses have embraced a convergence
philosophy and are successfully driving the
digital age forward. We are creating new
forms of content and services to deliver
consumers the 21st century entertainment
experiences they desire. At the same time, we
remain focused on current and future profit-
ability by strengthening our core businesses
and pursuing growth opportunities, and by
continuing restructuring efforts to reduce
costs and gain efficiencies.
Our positive momentum is a true testament
to our new executive leadership at Sony Music
Entertainment Inc. (SMEI) and Sony Pictures
Entertainment Inc. (SPE). Both SMEI Chairman
and CEO Andrew Lack and SPE Chairman and
CEO Michael Lynton are utilizing their extensive
business experience, financial discipline and
creativity to evolve their companies, to develop
new opportunities and to facilitate cross-
company collaboration.
In the fiscal year ended March 31, 2004,
Sony’s entertainment divisions took steps to
improve profitability through a discerning
approach to content development and the
successful execution of cost-saving initiatives.
Significant savings were achieved through
overhead reductions, streamlined shared
services, consolidated buying and more effec-
tive marketing and promotional spending.
Moving forward, we expect to generate
additional savings by continuing to evolve
more efficient business models.
To stimulate revenue growth, Sony’s enter-
tainment businesses are leveraging new
distribution platforms by expanding our
valuable content libraries, digitizing existing
content to license to emerging mobile and
broadband services, and creating unique content
for new and exciting channels and formats.
Sony is also fostering innovative digital content
services, such as the Connect online music store;
SoapCity® for soap opera video-on-demand;
and Sony Music Mobile for ringtone and music
In May 2004, Sony launched the Connect music
store in the U.S., offering consumers an easy-to-
use, affordable and secure means of purchasing
music online for download to a wide variety of
Sony portable electronic devices. Customers can
choose from hundreds of thousands of music
tracks from all major and many independent
music labels. Music fans can purchase singles for
99 cents and albums starting at $9.99. In the
U.S. alone, Sony has sold more than 2.5 million
Walkman-branded devices that are already com-
patible with the Connect store. By the end of
2004, that number is expected to increase to
nearly 7 million. In addition to Hi-MD Walkman
digital music players, other compatible devices
include Net MD Walkman recorders, ATRAC CD
Walkman players and Network Walkman players.
This year Sony expects to introduce a Connect-
compatible pocketsize hard disc drive Walkman
device that will hold up to 13,000 songs and
provide a 30-hour battery life. In Europe, the
Connect store launches in summer 2004 in
France, Germany, and the United Kingdom.
A music store for the digital age
Embracing the Sony spirit, entertainment
businesses drive the digital age forward to
offer 21st century experiences
Howard Stringer, Vice Chairman, Corporate Executive Officer Motion Picture & Artwork © 2004 Columbia Pictures Industries, Inc. All Rights Reserved.
Spider-Man Character ® & © 2004 Marvel Characters, Inc. All Rights Reserved.
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