Sony needs more than MJ to wow users

(China Daily)
Updated: 2009-07-23 09:58

Sony Corp is channeling the spirit of Michael Jackson.

Facing Sony's first back-to-back annual losses in half a century, Chief Executive Officer Howard Stringer is eyeing an obvious payday: film rights to the late star's wildly anticipated last concert rehearsals. And who can blame Stringer, given that Sony owns the rights for Jackson's Off the Wall, Thriller, Bad, Dangerous and HIStory albums?

Yet even blockbuster sales from a new Jackson video won't save Sony from the two biggest drains on profits: Japan's flagging economy and a dearth of innovative ideas.

Yes, Sony's getting a boost from renewed demand for Jackson's tunes following his June 25 death. And, as Bloomberg News reported on July 20, Sony Pictures is close to acquiring the rights to film of Jackson's last rehearsals, having offered $50 million for the footage. Given the huge interest Jackson's death generated, this specific investment may pay off.

Investors tend to get all excited when a Sony film has a big weekend. Fat box-office receipts from the likes of Angels & Demons certainly help, yet they don't trump a laundry list of problems ranging from Apple Inc's iPod music player to Amazon.com Inc.'s Kindle book reader to weak global demand.

Cost-cutting helps, especially with Japan in recession and deflation returning. Sony is eliminating 16,000 jobs, shutting factories and reducing the number of suppliers to cope with the global crisis. In May, the company forecast it would post a second straight annual loss for the first time since 1958.

Sony's real problem, though, is a general lack of must-have, industry-shaking products. Stringer, for example, is under mounting pressure to cut prices on PlayStation 3 to make the $400 game console more competitive. And that's one of Sony's biggest headline-grabbing products in recent years.

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