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6 Sony Corporation6 Sony Corporation
Operating in a shrinking market, the Music segment generated an increase in oper-
ating income, thanks partly to a string of hits by new artists at Sony Music Entertain-
ment (Japan) Inc. (SMEJ), which greatly bolstered SMEJ’s recorded music sales. In
the Pictures segment, expanded box office revenue as well as sales of titles on DVD
and VHS—attributable to such hits as Spider-Man 2—drove both sales and operating
income to new heights.
During the period, we took several steps that reinforced the already formidable posi-
tion of our entertainment business in the industry. Of particular note, we formed two key
equity and business alliances. In August 2004, we created SONY BMG, a joint venture
that brings together our non-Japanese recorded music business Sony Music Enter-
tainment Inc. and BMG, the music group of Bertelsmann AG, with the aim of raising
profitability through enhanced efficiency and expanded scale. In April 2005, a consor-
tium comprising Sony and four partner companies completed the acquisition of
Metro–Goldwyn–Mayer Inc. (MGM).
In addition to using our global channels to distribute MGM’s existing library of film
and television content, we will be involved in co-financing and producing new titles.
New Management Structure
Guided by our “Transformation 60” (TR60) groupwide medium-term corporate strategy—
which focuses on structural reforms aimed at enhancing operational profitability and
growth strategies—efforts to reduce fixed costs through the restructuring of operations
are proceeding according to plan. Although our electronics business has yet to suffi-
ciently recover in terms of profitability, we have been implementing strategies that
will ensure the steady growth of the Sony Group. The fiscal year ending March 31,
2006, marks the start of the next stage of Sony’s evolution—a stage of accelerated
growth. Accordingly, we judged this to be an opportune time to create a new
management structure.
At the Board of Directors meeting to be held following the Ordinary General Meet-
ing of Shareholders on June 22, 2005, we expect three candidates for positions on
the Board to be approved: Sir Howard Stringer, nominated as Chairman and Chief
Executive Officer (CEO), Dr. Ryoji Chubachi, nominated as President and Electronics
CEO, and Mr. Katsumi Ihara, nominated as Executive Deputy President and President
of the Home Electronics Network Company. Under the robust guidance of this new
management team, the Sony Group will remain on course for further growth.
April 26, 2005
Nobuyuki Idei
Chairman and Group Chief Executive Officer
(Appointed Chief Corporate Advisor on June 22, 2005)
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