Sony Pictures CEO Tony Vinciquerra talks ‘arms dealer’ strategy, defends ‘Spider-Man’ spinoffs
As a seasoned executive with decades of experience under my belt, I must say it’s been a privilege to follow the journey of Sony Pictures Entertainment. The company has grown and evolved in ways that mirror the dynamic nature of the entertainment industry itself.
Upon joining Sony Pictures Entertainment in 2017, Tony Vinciquerra found things were anything but routine.
The Culver City studio had not yet recovered from a 2014 cyber attack, which leaked employee personal data and confidential communications, tarnishing its image and causing substantial financial losses. In fact, the studio’s poor performance during this period forced Sony Corp., its Japanese parent company, to record a nearly $1 billion loss only a few months before Vinciquerra was appointed as the new CEO and chairman.
At the time, he was working at private equity firm TPG after a long career at Fox Networks.
Vinciquerra, at 70 years old, mentioned that he hadn’t been considering a return to full-time employment with daily office attendance. However, what caught his attention was the opportunity that presented itself.
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He’s not a studio boss from central casting.
Under his leadership, Sony Pictures mounted a comeback.
The film studio brought new life to numerous franchises such as “Jumanji” and “Bad Boys,” produced critical “Spider-Man” films, and began profiting from its Sony Interactive Entertainment video game branch by developing movies and TV series based on their properties. They also continued to foster their popular shows like “Jeopardy” and “Wheel of Fortune,” managing host transitions for both. Additionally, they expanded their horizons by investing in the anime market and purchasing movie theaters.
However, Sony’s studio wasn’t immune to difficulties either. Just like any other studio, it faced challenges due to the pandemic and last year’s double strikes. The company even made an unsuccessful attempt to acquire Paramount Global recently. Furthermore, their attempts to broaden the “Spider-Man” universe through movies featuring characters other than the main hero haven’t been blockbuster hits at the box office.
On January 2nd, Vinciquerra is set to relinquish his position and pass the reins over to the current COO of Sony Pictures, Ravi Ahuja, in a prearranged transition that has been hinted at for several months.
Ahead of his final day, Vinciquerra sat down with The Times to look back on his over seven-year stint at Sony Pictures and discuss his future plans. The following discussion has been streamlined for better understanding and brevity.
Describe the state of Sony Pictures when you arrived in 2017.
Back in June ’17, the atmosphere in the studios and the business world was still reeling from the hacking incident. The fallout was immense, with significant breaches of privacy and widespread email leaks. This tension was tangible; you could sense it in the air.
The financial reports indicated numerous opportunities for enhancement. What made Sony unique was its ownership of films, music, video games (PlayStation), and technology – a rare blend of assets unmatched by any other company in the industry. I found it puzzling why they weren’t exchanging intellectual properties or collaborating more effectively across their divisions. This seemed like an excellent chance for improvement; it was one of the main reasons I chose to join this company.
What were your main priorities when you started in the job?
Recognizing that all our rival firms were either launching or planning to launch general entertainment streaming platforms, we found ourselves in a situation where it seemed prudent to do the same. However, upon reflection, we questioned why we should follow suit when seven or eight of our competitors were already doing so. If they were preparing for a fierce battle over subscribers, wouldn’t it be more strategic for us to supply the necessary tools – essentially, the weapons – for these streaming services to compete against each other? This way, we could potentially enhance our own business by catering to the demand created by this competition.
At that point in time, our company operated 110 cable networks. It was evident that this particular sector was experiencing a decline. Consequently, we formulated a plan to largely exit this business, with exceptions made for markets where cable networks are thriving, such as Latin America, Spain, and India.
Reflecting on the events involving the streamers, it appears that the arms dealer’s foresight was quite remarkable, given the current situation.
It’s clear as day, and it’s equally evident regarding the choice of using a cable network. In essence, the current state of business involves most streaming services trending towards profitability, but unfortunately, the trajectory of cable networks is misguided, and this trend isn’t likely to reverse. This appears to be the primary concern for our fellow companies at the moment.
How do you feel about the future for anime?
We haven’t rolled Crunchyroll out in the entire world yet, so we still have quite a ways to go. The audience for anime is violently passionate — violent in a good way, not violent in a bad way. They are the most passionate audience ever. It’s got a great future. And unfortunately, others have noticed now and are starting to get into the business. Netflix and Hulu are starting to get in the business and raise the cost of product for us. But, you know, that comes with success.
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Nowadays, it’s no longer common for people to casually stroll into a theater to check what movie they’ll watch next. Instead, theaters are finding alternative methods to recoup lost revenue.
A portion of your employment period was marked by strikes, and you’ve previously expressed your views on how the union contracts are driving up costs and pushing productions away from the U.S. Do you believe the proposed film tax credit in California could alter this situation?
It appears that the alteration in California won’t significantly affect [the situation], as it continues to exclude high-profile actors, fails to address casting issues, and remains a complicated procedure to execute within California.
Apart from increasing costs due to union agreements, California also adds expenses through its regulations and complex procedures for getting production done. As I’m about to leave my position, I recommend they conduct a thorough review of the program and the business constraints, aiming to find solutions.
How do you feel about the performance of the film studio during your tenure?
As a dedicated movie enthusiast, I must admit that our recent releases have mostly been hits. However, the latest one – “Kraven the Hunter” – which I just released last weekend, and my previous launch, didn’t quite meet expectations. Frankly, it wasn’t the successful debut we had hoped for, and I’m still trying to grasp why this happened because I genuinely believe that the film is not a poor production.
However, we’ve achieved remarkable success during my tenure. We’ve consistently surpassed our budgets, even amidst industrial actions and the challenging times brought about by COVID-19. Moreover, numerous employees have received maximum bonuses in several years. It has been an impressive journey, and the film studio significantly contributed to this triumph.
Regarding “Kraven the Hunter” and the fact that Sony released “Madame Web” earlier this year, both films struggled at the box office.
Let’s discuss “Madame Web” briefly. The movie didn’t do well in theaters, but it was highly praised on Netflix. Despite this, the media seemed to be harsh towards it and other films like “Kraven” and “Madame Web.” Critics seemed to dislike them intensely for some reason. However, this wasn’t the case with “Venom,” as the audience adored the movie and made it a massive success. It appears that these films were unfairly criticized by the media.
Do you think that the “Spider-Man” universe strategy needs to be rethought?
It seems to me that we might want to approach it differently, given its history of being harmed. Placing a new one could potentially lead to its demise, regardless of its quality or shortcomings.
How do you feel about the state of the industry going into 2025?
Over the next year and a half to two years, there’s an expected period of rebalancing assets. This might be a bit tumultuous, but here’s what we can predict with certainty: the desire for entertainment will persist, though it may evolve slightly. Once these companies find their footing and stabilize, they’re poised for a prosperous future ahead.
2026 promises an exciting chapter in both film and television industries for us. Our television segment continues to thrive, with our market share consistently increasing, giving us a sense of satisfaction. We’re not just resting on these laurels, though. We’re exploring other business ventures as well. While the film and TV sectors might not be the best avenues for growth in the future, we’re focusing our attention elsewhere. We have Crunchyroll, Alamo Drafthouse, and are considering location-based entertainment projects. Overall, I feel confident about the current state of our company. It’s quite stable compared to others in the industry.
What made Sony interested in the Alamo Drafthouse deal?
This idea for watching movies is quite distinct and original. Since it’s a rather tiny enterprise, we need to expand into markets crucial for domestic box office success.
Despite Alamo having just 41 locations, it boasts an impressive 4.5 million members in its loyalty program, providing us with a direct line to communicate with these customers – a significant advantage for us moving forward. Furthermore, the customer demographic of Alamo Drafthouse is remarkably similar to Crunchyroll’s. Therefore, we plan to utilize this partnership to market Crunchyroll and explore numerous other opportunities. This strategic move was not a substantial financial investment, but the insights into our customers’ preferences gained from this collaboration will yield tremendous benefits for us in the long run.
After you step down, you’ll be moving into an advisor role for 2025. What does that role look like?
I’m ready to help address any queries you might have. Additionally, I’ll be collaborating with Sony Tokyo, albeit from another office location that may not be easily accessible. The specifics are yet to be determined; we’ll just have to wait and see how everything pans out.
What are your plans for the future?
I don’t know yet. I’ve had a lot of outreach from private equity firms and and other investment-oriented companies. I’m not going to think about it until after the holidays. But most likely will involve some return to private equity or investment companies, but not for sure.
How would you describe your legacy at Sony Pictures?
Where I get my psychic reward is helping people to do their jobs better and get better in their careers, and that’s really how I judge how well I do. The second part of that corollary is to leave a place better than I found it. And I think I’ve done that most every place I’ve been at. I like to fix things and that’s really how it all comes together.
It seems like I’ve made a positive impact on this place, but only time can confirm. This business appears to be quite robust, which is something I hope to leave behind as my lasting contribution.
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2024-12-28 15:34