Sony Wants To make a bigger investment in original content

Sony is redirecting billions into producing original content, including a significant focus on animated content. The move is being called a “creation shift” by the Japanese tech company, per a report in Financial Times.

The plan is to create more original IPs and realign focus from the distribution side of the business to improve Sony’s ROI, as per an interview that ran last week in the Financial Times. “Whether it’s for games, films or anime, we don’t have that much IP that we have fostered from the beginning,” CFO Hiroki Totoki said. “We’re lacking the early phase [of development], and that’s an issue for us.”

Sony’s entertainment spending has already been trending up over the past few years. Since Yoshida took over running the company in April 2018, it has spent US$10 billion on movies, games and music—all of which account for roughly 60% of its annual revenue.

A central part of the company’s growth strategy moving forward will be animation content, particularly anime. Through its streaming service Crunchyroll, Sony currently releases around 200 titles a year, and wants to release even more.

The company also plans to leverage its Playstation Network service to grow Crunchyroll’s subscriber base, which is currently around 15 million. “About 30 per cent of PlayStation Network service customers watch anime, but only about 5 per cent have Crunchyroll accounts,” Totoki said.

Crunchyroll releases nearly 200 titles a year, so it’s naturally expected to play a big role in Sony’s ramped-up content plans. But that’s not to say the anime industry isn’t dealing with its own issues—Crunchyroll president Rahul Purini has estimated that anime production costs have increased by 40% to 60% in the past few years, for example.

“Given the constraints within the ecosystem, there is opportunity for various companies, including Sony, to see if there is a way to add additional capacity, bring additional talent and potentially leverage digital technology in the creation process,” Purini told FT.

“Some of our research shows that there are more than 800 million anime fans globally, and there [will] be a billion in the next few years”.

Sony revealed back in May that it is currently developing a new animation production software called AnimeCanvas through production studios A-1 Pictures and CloverWorks, which are part of its subsidiary Aniplex. It is not clear what the software actually does, but Sony said that the software was dedicated to “improving the production environment, efficiency, and enhancing the quality of output.”

Sony is also keen to leverage lessons learned from its PlayStation Network service to improve Crunchyroll engagement, with joint promotions being considered. “About 30% of PlayStation Network customers watch anime, but only about 5% have Crunchyroll accounts,” Totoki noted.