Another Myth Busted: Sony is Having A Good Financial Year! (1 Viewer)

[Justin Lane]

I am confused. If Sony is having a good earnings year, wouldn't you think they would support SACD a little bit more with a few more releases this year. No releases in a bad earnings year is understandable, but it says bad things for the future of the format with Sony if they are indeed having a good financial year.

I did some investigating of my own. Looking at HFR at their Super Audio Press releases for this clender year, to date, Sony has released more Dual-Discs than SA-CD! What gives? Maybe they have something big on the way, or maybe not. That hybrid John Mayer discs that was supposed to be day and date has been in limbo forever.

J

 

[Marc Colella]

Let's not forget Sony's upcoming SACD release list:

http://app.sonymusic.com/SACDSearch/...on=newreleases

Sony should add a crickets sound-effect when you visit the page.

 

[Justin Lane]

Marc,

That page says it all.

J

 

[Phil A]

Lee, so far in this thread I've learned:

You know more about what other people say and mean than they do - I have it say it is impressive

You're a top notch expert in the field of corp. acctg., especially impressive that you know more than people with many years experience

You know more about Sony's priorities than they publicly indicate

I honestly think you should take a hard look at what you write. How many times have you been asked if you work for Sony? Do you understand why people write that?

I really do think that more people here (just my opinion)would be more interested in the DVD-Audio format with its similarites on navigation and video content to DVD-Video. When I personally seriously listen to music, whether it is stereo or multi-channel, I prefer the manner in which I can do it on my XA-777ES. I don't have a problem with someone else's opinion. Perhaps a poll would be good, as long as its just kept to a vote so it does not turn into a discussion like my format sounds great and yours sounds like an MP3 inside a sewer pipe.


Anyway, here are the latest news releases from Sony on SACD and what Qualia is doing for those interested:

http://www.twice.com/article/CA40206...ults&text=sacd

http://www.twice.com/article/CA41211...ts&text=qualia

 

[Lee Scoggins]

I don't think we should get personal here Phil. I was trying to be thoughtful in my response to you. You did accuse me of taking your words out of context but I tried to show you where the wording was misleading. If I did not get it right then I apologize, but let's not have any personal attacks here...please argue your case and points on the merits.

We may both present good arguments and still not have a meeting of the minds ulimately but if we debate honestly then my hope is some understanding is passed along to anyone who reads the posts.

I certainly understand the problems with FASB and corporate accounting but I don't think that negates that Sony is making money this year even in music. I think there are many entertainment conglomerates that are losing money in music but are being propped up by film divisions or other businesses. My overall point is that Sony has been through a difficult period, they are still a fairly strong firm from a financial standpoint. That's just my honest analysis.

I don't work for Sony; I am working in the reinsurance industry but I do have some pretty good financial skills and if my view can bring some thoughtful discussion to bear then I will keep typing away.

I think the key point is that Sony has enough cash and capital to continue Super Audio for some time if they choose. As to what happens over the next few years, I really don't know as too many factors are involved. I would like to see some more new releases (I agree its been very slow from these guys) and a real big commitment on some big & noteworthy albums.

 

[Phil A]

"I would like to see some more new releases (I agree its been very slow from these guys) and a real big commitment on some big & noteworthy albums."

That is something we are in complete agreement with. I never said or implied Sony was broke or in as bad shape as some other music cos., just that the whole industry is hurting. Many things are being tried incl. this interesting device I found a story on:

http://aolsvc.news.aol.com/news/arti...9990002&_ccc=5

 

[Lee Scoggins]

Phil,

I'm sorry I don't wish to subscribe to AOL to get the news story, but we do agree that the music industry is hurting.

I think the answer has to involve bring more value to the consumer like maybe pricing new albums competitively and perhaps offering a hirez layer, making efficient downloads priced cheap, stopping the suing of the customer base (?!) and probably better marketing.

 

[Brian-W]

I'm going out into the deep end, but face it - Playstation provides Sony the money to stay in business AND profit, while this past year movies added significantly more profit than previously.

If it weren't for Playstation, Sony would still be posting nothing but losses. The last four years of Sony financial records clearly show that Playstation contributes more and more to their bottom line every year.

Now, why Sony doesn't leverage their technologies into PS-3 (no guarantee they will), well, it would make too much sense

 

[Lee Scoggins]

Simply not true. The operating profit for Sony was $951 million, backing out roughly $650 million for Playstation would still leave you with a positive operating profit and net income.

But then again, it doesn't matter does it? Many firms use a profitable business to support a recovering business unit.

 

[Brian-W]

...and backing out the film sides $351 million contribution (Sony Pictures hasn't alwasy been a stellar performer) and you're back to losses.

Having ONE product and service generating more than 65% of your revenue is not only magnificent, but also truly scary.

 

[Michael St. Clair]

Once everybody thought Nintendo would stay on top forever. I don't see Sony losing their top market share during the next generation (PS3, XBox2), but eventually it is very likely. Sony had better have more diverse strengths when it happens.

 

[Lee Scoggins]

But you are saying two major divisions would have to fail massively (which is different from your post). Highly unlikely. And even then sony has more than enough cash on hand to last years...

The beauty of wide-ranging conglomerates in entertainment is the balance provided by other business units being profit generators. Both the film and music business have been subject to the recession and major shifts in consumer buying behavior. Now Sony is getting its act togehter to deal with those problems in music by scaling back operations to keep costs more in line with revenue and the economic recovery is helping Music and Film.

Sony has been through tough times before but they have a fairly rich history of innovating their way out of things. I'm sure Music would be in far worse shape (as well as the separate royalty income line) if they did not invent Super Audio.

************

One more angle to look at is what Wall Street's institutional investors think of Sony. SNE has had a 61.5% one year return. Clearly the capital markets see value in the company. As long as that holds Sony has a lot of options in terms of raising capital to fund new acquisitions or invent or invest in things like BluRay.

 

[Brian-W]

But Sony has been in tough times since 2001. Many companies have either pulled back in front, or came out of no where (Samsung, LG) and are on top. Their electronics business has been in the doldrums since the end of 2000, their Vaio line while popular isn't the cash cow everyont thinks it is (too much competition, too many suppliers),

SACD has yet to be proven to help Sony's bottom line. If you really believe that, show me some facts that back this up.

The point is, without Playstation and the movie business, Sony would be in trouble. Don't confuse "trouble" with bankruptcy, very different. The very companies that are producing as good (better if you ask some people) of products for less money are hurting them seriously. LG and Samsung are cutting into what was a huge revenue generator for Sony: Televisions and display devices. That has always been the cash cow for Sony, much like the 747 series of airplanes for Boeing.

Sony (and other Japanese companies) are under a serious threat from cheaper, yet as-good-as, products from Korean and Chinese based companies.

Sony has a lot of fat to trim before they can start seeing profits from their electronics divisions.

 

[Lee Scoggins]

These are contradictory statements. I think talking about Sony without the Game and Film business is like talking about something that is extremely remote. I also think with the restructuring we will see more music profits as Sony is predicting and the economic recovery will lift the hardware sales.

As for TVs, Sony is not emphasizing this area as much...the real demand in is flat panels where Sony did very well.

I like a lot of the Korean products-my new LG cell phone is awesome, but I would not go as far as saying the Koreans as "as good as" products in general, that IMHO applies only in select product lines. I would choose a Sony audio or video product first over LG at this point in time.

 

[Brian-W]

BS. Sony acquired Columbia in the early 90s and began the games business in the mid-90's. In other words, they were NOT Sony staples of the past decades, or Sony history of any kind. Without these two units, Sony wouldn't be posting these great profits.

Don't be naive about SACD contributing with anything more than a trickle to profits. It's not like 99% of all DVD players play SACD and are paying royalties, and we all know the dearth of software isn't either.

Sony is in the DVD royalty pool, hence their large royalty reporting, plus their redbook royalties. Sure, I'm sure SACD contributed to the royalty pool (like less than 2%), but it isn't anything substantial like you make it out to be.

 

[Chu Gai]

Playstation sales and games are lagging also

 

[Lee Scoggins]

Brian, where did I state otherwise? I was just pointing out that you claimed minus Games, Sony had losses but the numbers show this is not true. Why can't you admit I was correct about this?

Then you said that they would have had losses if not for Games and Film (movie business). That is contradictory to the first statement.

You don't know what the split between DVD royaltess and SACD royaltees are so quit guessing. I betcha the Super Audio royaltees might be significant since they get them on both software and hardware sales.

I have clearly made the case that Sony is doing fine financially. I think I will opt out of the discussion and focus on more positive efforts...

 

[Brian-W]

It's okay for you to speculate without any evidence but anytime anyone else does (when it's against Sony) it's not okay.

I too will opt out of this discussion, you're blinded by your infinite love for Sony.

 

[Rachael B]

R U guyz CPA's?

 

[Phil A]

Rachael I think CPA stands for cleaning, pressing and alterations