Sony 2005 Annual Report Download - page 18

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16 Sony Corporation
Entertainment
The fiscal year ended March 31, 2005 was a pivotal year in Sony’s entertain-
ment businesses, with the successful integration of the SONY BMG MUSIC
ENTERTAINMENT (SONY BMG) joint venture and a record performance by
Sony Pictures Entertainment Inc. (SPE). In addition, the acquisition of
Metro–Goldwyn–Mayer (MGM) by a consortium led by Sony Corporation of
America (SCA) was completed in early April 2005.
In August 2004, Sony Corporation and Bertelsmann AG merged their recorded music
assets to create SONY BMG, a joint venture with an impressive array of current
artists and a vast catalog that includes some of the most important recordings in
history. SONY BMG is streamlining its operations and investing in talent development
to position the company for future growth.
In the fiscal year ended March 31, 2005, SPE generated record-breaking operating
income, due in part to the worldwide success of Spider-Man 2, strong home
entertainment sales and international television syndication. In April 2005, a consor-
tium comprised of SCA, Providence Equity Partners Inc., Texas Pacific Group,
Comcast Corporation and DLJ Merchant Banking Partners completed its acquisition
of MGM. In conjunction with the acquisition, SPE entered into agreements to co-
finance and produce new motion pictures with MGM and to distribute MGM’s existing
film and television content. The members of the consortium entered into a separate
agreement to form a joint venture, to be managed by Comcast, establishing new
cable/satellite channels that will feature SPE and MGM content.
By expanding access to content, Sony’s entertainment companies have improved
their strategic position. Licensing of the content to existing and emerging distribution
channels such as digital cable, mobile and broadband services, as well as distribution
in new media formats, are expected to create a wide array of revenue-generating
opportunities.
Through the consortium’s acquisition of MGM, one of the world’s most
renowned motion picture studios, Sony has created a strategic partnership
with a massive library of entertainment content.
MGM owns the world’s largest library of modern films, comprising approxi-
mately 4,000 titles. MGM’s film library has received 208 Academy Awards®,
making it one of the largest award-winning collections in the world, and it
includes several of the most successful film franchises in history, including
James Bond, Pink Panther and Rocky.
Additionally, the library also includes over 10,400 episodes from television
series previously broadcast on prime-time network television, cable or in first-
run syndication, where original episodes are initially broadcast on a syndicate
of television stations and not on a single network. The programs in the MGM
library have won, among others, 108 Emmy Awards and 17 Golden Globe
Awards.
With our strong financial and strategic partners, Sony looks forward to
building on MGM’s exceptional legacy and capitalizing on emerging technolo-
gies and markets to provide consumers worldwide more opportunities to enjoy
MGM’s vast library.
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