Sony has announced loses of almost $1 billion, which the Japanese corporation has put down to lack of DVD sales. Sony told its shareholders that the value of its movie business was being slashed by $977 million. The company blamed plummeting DVD and Blu-ray sales as the main cause:
“The impairment charge resulted from a downward revision in the future profitability projection for the motion pictures business within the pictures segment,” said CEO Kazuo Hirai and Sony Entertainment CEO Michael Lynton.
“The downward revision was primarily due to a lowering of previous expectations regarding the home entertainment business, mainly driven by an acceleration of market decline. Underlying profitability projections of film performance were also reduced, but the adverse impact of that reduction is expected to be largely mitigated by measures that have been identified to improve the profitability of the motion pictures business.” the statement added.
Sony spokesperson Takashi Iida reiterated this:
“The decline in the DVD and Blu-ray market was faster than we anticipated.” he told Bloomberg News.
It also doesn’t help that Sony didn’t have the best year at the box office, with the likes of The Magnificent Seven, The Brothers Grimsby, Inferno, Angry Birds and Ghostbusters performing below expectations.
Last month, streaming films overtook DVD sales for the first time, a trend that is only expected to grow.