Sony Wants Chain of ‘Events’

This week, Sony President Nobuyuki Idei trotted out the members of his handpicked management team, who are mandated to put a new face on the company’s Hollywood-based studios and regenerate the movie operation.

In order to do so, newly installed Sony Pictures President John Calley and his group are going to have to do more than just put successful movies together--as if that isn’t hard enough.

He and his new partners, Co-President Jeff Sagansky and Executive Vice President Masayuki “Yuki” Nozoe, and other key Sony executives, have the daunting task of essentially fixing a company that has long operated without a decisive strategy and effective infrastructure to support it.

*

Because of limitless spending under a former regime, the Culver City lot that houses Columbia Pictures and TriStar Pictures has no problem with outside appearances. Hands down it’s the best-looking physical plant in Hollywood.

But the Sony Pictures organization is in need of a virtual make-over from the inside out.

At his first news conference with the U.S. entertainment media Tuesday, Idei stressed the importance of Sony creating an integrated “value chain,” a buzz word for using all the company’s resources to maximize the value of its movies, TV shows and music offerings. Unlike its competitors, Sony has been unable to extract maximum revenue from its film entertainment because it did lacked the internal discipline to plan, execute and exploit its event-like films beyond the theatrical box office.

Disney has been most successful in doing so, turning a movie like “The Lion King” into a billion-dollar bonanza. Warner globally exploited its “Batman” franchise as did Universal Pictures with “Jurassic Park.”

Sony by contrast missed significant opportunities on last year’s holiday release “Jumanji,” which starred Robin Williams in an adaptation of Chris Van Allsburg’s popular children’s book. The live-action movie, an adventure story about a man trapped inside an ancient board game that comes to life when the dice are rolled, did very respectable box office business, grossing $265 million worldwide.

It sold about 10.5 million video units globally, adding an additional $150 million or so to the coffers. But Sony netted only a few million more from such products as trading cards, a board game, plush toys and other knickknacks, a number which an executive at the studio says “should have been no less than $10 million.”

The Sony source estimates that the studio made around a $100-million profit on the movie, which cost about $65 million to produce and another $60 million to market worldwide. While that profit margin is nothing to sneeze at, it could have been a lot more, say several senior executives at the studio.

“Ultimately, the picture ended up being underserved,” said one executive, adding, “We missed an opportunity.” The movie, said the source, “had some unique aspects to it and we didn’t do a lot, we missed the boat . . . . We had an underwhelming licensing and merchandising program and the reasons were structural.”

*

Disney, acknowledged another Sony executive, “would have made a lot more money on that film.” That studio would have cross-promoted the film across all its divisions, including theme parks, consumer products and licensing and merchandising. “We haven’t had that unity of commitment,” admits a Sony executive.

Unlike the kind of far-reaching awareness that Disney is creating in the marketplace for its upcoming Thanksgiving release “101 Dalmatians” or previously created with “Toy Story” and all its animated films, Sony failed to create such demand or buzz around “Jumanji.”

“You have to create consumer impressions,” says a Sony insider. “ ‘Jumanji’ delivered [box office], but we never got any more bang for the buck. It was like a picture performing with a bum knee.”

Conversely, “everybody is talking about ‘101 Dalmatians’--they created the impression out there that it’s an event,” noted the source.

Sony not only didn’t have an infrastructure in place, but as one source put it, “the key managers here did not operate optimally.”

A good example is how Sony Pictures has never capitalized on consumer products, which is ironic given that its parent company’s core business is consumer electronics.

*

In 1992, former Sony Corp. of America chief Michael Schulhof launched an omnibus consumer products/licensing and merchandising division called Sony Signatures to exploit the studio’s film, TV and music titles, as well as create product and retail sites. But he based it in San Francisco, which couldn’t have been more removed from the Sony’s movie marketing arm in Culver City.

Instead of “Jumanji” being a joint promotional effort between the two divisions, it was handled exclusively out of the Northern California-based operation--which in retrospect was considered a big mistake inside the company.

Last May, Sony moved Bruce Stein, its head of interactive entertainment, to Los Angeles to become president of its newly minted Sony Pictures Entertainment Consumer Products Marketing Group, the successor company to Sony Signatures. But three months later, Stein left to rejoin Mattel Inc. as head of its worldwide operations.

Plans call for the division to be ramped up, as Sony executives now say they’ve learned their lesson and are going back to the drawing board to find more effective ways to serve the studio’s product.

A good test case will be TriStar’s planned Summer 1998 release “Godzilla,” to be produced by Roland Emmerich and Dean Devlin, the team behind Fox’s blockbuster “Independence Day.”

Executives at the studio say the monster movie remake is the focal point for getting the system right. “It’s the kind of movie with which you can create a worldwide event,” said a Sony source.

The jury is still out as to whether Sony can rise to such an occasion.