Sony Pictures, the film and television division of Sony Corporation, reported a sharp decline in its quarterly profit for the first quarter of 2023, which ended on June 30. The company’s profit fell by 68% to $115 million, down from $394 million in the same period last year. The company attributed the decline to lower revenue from TV series and streaming licensing, as well as higher marketing costs for theatrical releases.
TV Series and Streaming Licensing: A Drop in Revenue
Sony Pictures’ revenue from TV series and streaming licensing decreased by 18% to $1.1 billion, down from $1.4 billion in the same period last year. The company said that the drop was due to reduced deliveries of US TV series, such as The Good Doctor and The Blacklist, as well as lower licensing revenue from its library content.
The company also said that the Covid-19 pandemic had affected its production and distribution of TV series, causing delays and disruptions. The company had to suspend or postpone some of its shows, such as Grey’s Anatomy and The Goldbergs, due to health and safety protocols. The company also faced challenges in selling its shows to international markets, due to travel restrictions and lockdowns.
The company said that it expected its TV series and streaming licensing revenue to improve in the second half of the year, as more shows resume production and delivery. The company also said that it had a strong slate of new and returning shows for the upcoming season, such as The Wheel of Time, Jeopardy!, and Cobra Kai.
Theatrical Releases: A Rise in Marketing Costs
Sony Pictures’ revenue from theatrical releases increased by 13% to $591 million, up from $523 million in the same period last year. The company said that the increase was driven by higher box office sales from its films, such as Spider-Man: Across the Spider-Verse and The Pope’s Exorcist.
However, the company also said that its marketing costs for theatrical releases increased by 36% to $332 million, up from $244 million in the same period last year. The company said that the increase was due to a higher number of films released in the quarter, as well as higher promotional expenses for some of its films, such as Black Widow and Jungle Cruise.
The company also said that its theatrical releases faced uncertainty and volatility due to the Covid-19 pandemic, which affected consumer behavior and preferences. The company had to adjust its release dates and strategies for some of its films, such as Morbius and No Hard Feelings, due to changing market conditions. The company also faced competition from other studios and streaming platforms, which offered alternative viewing options for consumers.
The company said that it expected its theatrical releases revenue and marketing costs to vary depending on the performance of its films and the recovery of the global box office. The company also said that it had a diverse and attractive lineup of films for the rest of the year, such as Shang-Chi and the Legend of the Ten Rings, Free Guy, and Ghostbusters: Afterlife.
Outlook: A Stable Profit Forecast
Sony Pictures did not provide a formal guidance for its quarterly earnings, citing the uncertainty and volatility in the market. However, the company maintained its profit forecast for the current fiscal year, which ends on March 31, 2024. The company expects to earn $835 million in profit for the year, unchanged from its previous estimate.
The company said that its profit forecast reflected its confidence in its business segments and its ability to adapt to changing market conditions. The company also said that it would continue to invest in creating and delivering high-quality content for its audiences across various platforms and regions.
