Hi, I'm happy to be here today. Five months into the CEO role at Sony Pictures, I'll be addressing three main topics related to our previous fiscal year's results and what's driving our successes. Current and anticipated market conditions in the entertainment industry and looking ahead, how SPE is positioned to grow amid industry volatility. No question, it's a time of tremendous change in the entertainment industry from ongoing consolidation, lingering effects of the pandemic and historic labor negotiations, the unease about tariffs and the economy. The industry has been an extended period of transformation and there's likely more to come with both consolidation and deconsolidation as media companies realign portfolios. In the midst of this change, SPE has remained stable and continues to deliver results.
As you saw in Sony Group's recent fiscal year-end earnings announcement, Sony Pictures posted sales for the fiscal year of $9.9 billion and operating income of $774 million. This is essentially flat from our prior year-end results, but ahead of our expected forecast. Despite turbulence in the industry overall, we were able to offset challenges through disciplined execution and spending and by delivering solid results across SPE's businesses. Our studio's differentiated strategies both in how and where we choose to do business.
Have supported this stability.
Our business may look similar to other studios from afar, but as you get closer our businesses are distinct and that is a strength in this landscape. For example, in film and TV. Our firm commitment to theatrical releasing and unique position as an independent studio that works with any and all partners remains a strong competitive advantage for us among our industry peers, as does our prominence in major growth areas like anime and game shows and our unique place within the broader Sony ecosystem of games, music, and world-renowned technology.
This past fiscal year at SPE we.
Saw several strong performances at the box office along with commissions and licensing deals for top-rated TV shows and continued growth of Crunchyroll in motion pictures. Several features did exceptionally well, both original films and franchises. It Ends with Us, an original movie based on a best-selling book, crossed $350 million at the global box office, a phenomenal result. Venom: The Last Dance brought in $479 million globally, demonstrating that there continues to be a strong fan base and audience for the franchise. Bad Boys: Ride or Die helped kickstart last summer's global box office and earned $405 million globally. The Garfield Movie delivered great results with $253 million in theaters worldwide.
One of Them Days, starring Keke Palmer and Sony Music artist SZA, was a major hit with audiences and critics, making $52 million at the box office on a modest budget, and we saw successes with several local language films as you can see in this slide, with very strong titles Germany, Spain, Japan and Brazil, and while Kraven the Hunter didn't do as well as we'd hoped at the box office, it performed very well in home entertainment, with consumer spending in the U.S. exceeding $20 million. In our Sony Pictures Television business, we've seen strong results as well. Our independence as a studio means we can focus on great storytelling and partner with creators to deliver top rated shows across platforms.
Key scripted shows with standout performances this past year included The Night Agent, Cobra Kai, The Boys, its spinoff Gen V and Dark Matter, consistently ranking on their platform's most watched lists. Our international productions are seeing great results including This City is Ours on BBC and iPlayer and Spanish language show Yo no soy Mendoza on Netflix. Documentaries and unscripted shows have also been successful this past year including the docuseries The Fall of Diddy on Max and Glitter and Greed: The Lisa Frank Story on Prime Video, which received a News and Documentary Emmy Award nomination. Our documentary film Never Too Much was a good example of close collaboration with our sister company Sony Music Entertainment. We also had projects from acclaimed documentary director R.J. Cutler, including Martha on Netflix, about lifestyle mogul Martha Stewart.
Additionally, the 90- Day Fiancé franchise continues to thrive on TLC with dozens of spinoffs delivering consistently high viewership. Several series were renewed in addition to being sold in hundreds of territories around the world, which you can see on this slide. I'll highlight just a few. Doc was renewed for a 22-episode second season on Fox following the tremendous success of Season 1 and was sold across North America, Latin America, Asia Pacific, and EMEA. Suspense crime drama Long Bright River starring Amanda Seyfried and drama series The Narrow Road to the Deep North starring Jacob Elordi have both sold to major distributors in international markets around the world. Our game show business continues to be immensely popular and a significant driver of revenue and profit for our TV business.
Overall, the 42nd season of Wheel of Fortune premiered as the number one entertainment television program, reaching over 80 million viewers this season, so far, far more than any other entertainment program on linear TV. With Ryan Seacrest taking over as host, the series had its largest premiere week audience in five years. Ratings for Wheel of Fortune are up year over year, unprecedented in today's linear TV landscape. Jeopardy has reached more than 77 million total viewers this season so far, ranking as the number two entertainment television program across all broadcast, cable and syndication programs, and just recently we closed a co-exclusive next day streaming deal with Disney and Peacock for Wheel of Fortune and Jeopardy, effective this September, which will mark the first time new episodes of the shows will appear on streaming.
We expect that this will allow streaming audiences, especially younger ones, to keep up with these iconic shows and we see sustained growth in our anime business. Crunchyroll is leading the way in meeting the rising global demand for anime and is an important growth pillar for us. With increasing collaboration across the Sony Group companies , Crunchyroll subscribers are growing with new distribution avenues for our vast anime library and the platform now has over 17 million paid subscribers. Crunchyroll has a long history of being the exclusive home and to some of the most beloved anime titles, including Solo Leveling, which became the number one title on Crunchyroll in 2024, and anime award-winning Demon Slayer . We have recently announced the launch of Hayate, a new joint venture with Aniplex and Crunchyroll dedicated to developing and producing premium content for anime fans worldwide.
This is great news for fans as it brings together two Sony sister companies with deep ties to the anime community and expertise in authentic, compelling stories. Now let's take a look at the broader market conditions shaping the entertainment industry. Video content consumption is quite healthy. Pay TV, while in certain decline, shows surprising longevity. Streaming continues to grow and viewers are accepting price increases and adopting ad models, and while other major studios who are also our buyers have started to sell more content to third parties, intensifying competition, the best content remains extremely valuable. Our independence works to our advantage here because our customers understand that we don't need to serve our own streaming platform. However, there are leftover issues from the streaming boom or Peak TV era which press on the bottom lines of many major media companies.
Those include disruptions to production and box office from a once in a century pandemic followed by once in a half century dual strikes, high streamer churn, media fragmentation and the appeal of new media platforms for younger viewers including YouTube, TikTok and Instagram. Younger generations also have different preferences for entertainment including anime, where we are well positioned with Crunchyroll. In the motion picture business, the box office rebound has been uneven. Against the backdrop of windows shrinking, we are also facing unpredictability in key territories including Russia and China, where U.S. films have not had a meaningful presence the past few years. With that said, we are seeing the pipeline for films starting to increase after the strikes, so the box office is poised to recover and top tier talent continue to value traditional theatrical runs to ensure their projects find their audience and make a splash.
Notably, the cost of production in the U.S. has become increasingly challenging. We are partnering closely with the MPA on efforts to expand tax credit programs and actively monitoring conversations around potential tariffs on overseas film and television productions. It's clear we are facing significant challenges and disruption in the entertainment industry, but the steps we've taken to strengthen the studio over the last few years have put us in a strong position to tackle these challenges strategically. We are not making radical shifts to our business. We are leaning into our competitive strengths and key market trends to accelerate growth. We are prioritizing competitive differentiation in all our businesses and refreshing and refining what is working well.
More specifically, we are focused on alignment with the best creators in the industry, continued investment in fan communities including franchises, anime, game shows and experiences appealing to younger audiences, media consumption habits and sensibilities, a renewed focus in India and further Sony Group collaborations. We have an energized and stable leadership team to support this growth. Our leadership team includes several executives from within Sony Pictures stepping into new roles, including our CFO, Chairman of Sony Pictures Television and Chief Communications Officer. We've also attracted top-notch talent from other companies including our General Counsel, our Chief Strategy Officer and a new leader for our India business. SPE has long been recognized as a reliable and valuable partner to talent in all areas of our business and we plan to continue prioritizing productive talent and filmmaker relationships through quality material rights and IP.
The best talent and creators follow the best material in the motion picture group. We continue to be known and valued for our commitment to theatrical distribution and our skill in executing and marketing. That distinction is closed deals and driven relationships with filmmakers, talent and partners who know the IP will be amplified on the big screen. We have a tremendous film slate for 2025 and beyond anchored by world-class directors including Danny Boyle's 28 Years Later, Sam Mendes' four-film Beatles cinematic event, Darren Aronofsky's Caught Stealing, Taika Waititi's Klara and the Sun, and in her first film since Barbie, Margot Robbie is starring alongside Colin Farrell in A Big Bold Beautiful Journey, which we'll be releasing this year. We're also continuing our successful relationship with Tom Holland with a producing deal under his recently launched Billy 17 banner.
And on a related note, our next live-action Spider-Man film, Brand New Day, starring Tom Holland, will hit theaters in July 2026, and our talented animation team is working on the final movie in the Spider-Verse trilogy, which will be in theaters June 4, 2027. Other beloved franchises are in the works, including Jumanji, Anaconda, I Know What You Did Last Summer, and the Resident Evil reboot, which will reinvigorate valuable IP for the studio. For Karate Kid fans, we recently released Karate Kid Legends, the next installment in our iconic martial arts franchise, so a lot to see in the theaters.
Our TV production groups continue to champion bold, creative storytelling from some of the industry's top creators and producers, evidenced by an exciting roster of upcoming series including Spider-Noir starring Nicolas Cage, our first live-action series based on Sony Pictures Universe of Marvel Characters , Lord of the Flies, adapted by the multi-BAFTA award-winning writer Jack Thorne, Messi and the Giants, a collaboration between Sony Pictures Television Kids and Sony Music, American Hostage starring Jon Hamm for MGM, Outlander prequel Blood of My Blood, The Boys prequel Vought Rising, and we have second seasons coming of Platonic starring Seth Rogen and Rose Byrne, Twisted Metal based on the PlayStation game IP, and The Boys spin-off Gen V. Key to our strategy, we are investing in fan communities in several ways.
We are driving the continued expansion of our incredibly popular game shows Wheel of Fortune and Jeopardy, with spin-offs such as Pop Culture Jeopardy, hosted by Colin Jost, which has been a success on Prime Video and the co-exclusive streaming deal with Disney and Peacock that I talked about earlier, which will boost exposure to new audiences, and last summer we acquired Alamo Drafthouse Cinema, a differentiated, fan-driven approach to the moviegoing experience. That acquisition anchored the launch of a newly established division called Sony Pictures Experiences and we are leaning into cross-marketing and collaborations across Sony Group. As I touched on earlier, anime is an important growth pillar for us that delivers high fan engagement and those fans are eagerly awaiting the theatrical release of Demon Slayer Infinity Castle this fall. We shared an update last quarter with investors focused solely on the Crunchyroll business.
I encourage you to watch that briefing which is hosted on the Sony IR site. Rahul Purini, President of Crunchyroll, delves into the specific ways we are meeting the rising global demand for anime and engaging with fans and younger audiences more broadly. That engagement with younger audiences is a key growth area and focus for us. We recognize that the nature of how Gen Z and Gen Alpha consume entertainment is distinct. Crunchyroll gives us a leg up here given its appeal to younger audiences. Our leadership team continues to be focused on identifying new opportunities to integrate and leverage platforms like YouTube in robust and meaningful ways. We also believe the opportunity in India remains huge with rapid economic and population growth.
Under the leadership of Gaurav Banerjee, formerly Star India's Content Lead as our new MD and CEO, the team is focused on strengthening content production and distribution related partnerships as well as rebuilding and reorienting our growth strategy, including investment in digital and our SonyLIV streaming platform. We recently secured exclusive media rights for all Asian Cricket Council tournaments from 2024 to 2031, which we anticipate will boost viewership and enhance SonyLIV. This joins our already strong slate of programming that includes India's hugely successful version of Who Wants to Be a Millionaire, which just completed its 25th season, along with Indian Idol, CID, Crime Patrol and Shark Tank India, among others, and SET India continues to hold the number four spot among most viewed YouTube channels globally. Lastly, collaboration with our sister Sony Group companies is a clear driver of growth.
Our projects with PlayStation Productions are perfect examples. The successful adaptation of Uncharted, the celebrated film Gran Turismo, the recently released R-rated horror film Until Dawn, and hit shows like The Last of Us and Twisted Metal reinforce the strength of our game IP for film and television. Looking ahead, God of War, Horizon Zero Dawn and Helldivers are in active development and you can expect to see an anime adaptation of the Ghost of Tsushima video game which is in the works. With Aniplex, Sony Music and PlayStation Productions, we are energized about Sony Pictures Entertainment's future and look forward to capitalizing on the active entertainment landscape with our unique strengths, building on our momentum and success. Thank you for your time.
Thanks very much for your presentation. It was very informative and thanks very much for taking the time to do this Q& A with us.
Sure. Happy to do it, Justin.
We have a bunch of questions from investors and I'd like to start with the business overall. Sony Pictures Entertainment and Sony Group Corporation speak a lot about the anime business as a key growth area. Are the motion pictures and television productions parts of Sony Pictures growth businesses and what are your expectations for those two businesses over time?
Thanks. Very good question, Justin.
Motion pictures and television are certainly our.
Core businesses and of course we will continue to find good opportunities to grow them. In motion pictures, for example, our slates. All slates in fact are improving as the industry recovers from the dual strikes. Similarly, in TV we're expecting higher series deliveries as we continue to recover from the impact of the strike. So in both cases there's recovery, but for both film and TV more generally, growth comes from creating new IP or from building on existing IP. It's one of those kinds of things. In film, for example, is our dedication to theatrical exhibition and our best-in-class marketing. Distribution teams have kept us really a preferred studio partner for major talent. For major filmmakers who want the cultural impact that only a theatrical release can provide.
That positions us really well to work with those best filmmakers on creating new IP and building on our existing IP. So as an example, this summer, and I mention it in the talk, we're bookended by two great directors. At the start of the summer, we've got Danny Boyle's 28 Years Later. Danny Boyle won an Oscar a few years ago, as we remember, for Slumdog Millionaire. Toward the end of the summer, we have Darren Aronofsky, who people will remember from Black Swan, where he was also nominated for an Oscar. We have his Caught Stealing with Austin Butler. Also very significant to creating new IP is our collaboration with our Sony sister company. Great opportunities to make new films, to make.
Shows. Think of The Last of Us.
For example, with PlayStation Productions and it's on HBO. Across both businesses, we're actively prioritizing franchise development as well for existing IP and fan engagement, which is critical to franchise development. We've had great successes as an example on two of our oldest TV properties, Wheel of Fortune and Jeopardy!, by leaning into fan communities, by leaning into their preferences. Those shows, as I mentioned in.
The talk are the number one and.
Number two entertainment shows in all of U.S. television far outperforming television viewership trends and are really unmatched as franchises. So we're really looking to replicate that type of success with other IP and therefore to create growth in film and TV.
Great, thank you. With production costs in the U.S. rising and the recent discussions around potential tariffs on internationally produced films, what are your plans for domestic film and television production? And will the tax incentives that you mentioned be enough to stem the flow of production
overseas?
Yeah, very good question. Also, there's been a lot of conversation about this, right? Because it's definitely an issue that we talk about and that we're focused on. The conversation is about what policies about what initiatives would help to keep production in the United States. I guess start off by saying for the U.S. this industry is a business the U.S. is very, very strong in. It's a global business. Over $22 billion in exports and $15 billion positive trade surplus with every major market in the world. So U.S. film and television are very strong. It's our desire to keep the U.S. an active and thriving production hub. The television, film and television industry supports over two million American jobs. Georgia, New York, New Jersey, Massachusetts, Louisiana, other states as well.
But those are some of the biggest ones, have vibrant production locations and robust tax incentive programs. Now, the thing is about U.S. production is we have to talk about California because the production decline in California is steeper than that of the rest of the U.S. So very important component in solving this issue. We've been working very closely with the MPA and unions and guilds. The MPA includes other studios and the unions and guilds to propose meaningful tax incentives and other levers to boost competitiveness in California. That's a very important thing to us and very important to the.
industry.
I'd like to move to your Pay-One deal. So the current Pay-One deal expires at the end of calendar 2026. How confident are you that you can renew the deal at rates that are comparable to or better than the existing?
deal?
Very confident. We feel really good about that. Our current U.S. film output deal has a unique deal structure and it's been exceptional for us and very importantly really for Netflix and Disney, who have our Pay-One output deal in the United States. For example, the films from our Pay-One output deal are often the top 10 at Netflix for an extended period of time. So our content does really well for our streaming partners, which is very important. It extends the life and the exposure of the films. Very important to us because it boosts library value over time. As we get into renewal discussions, which will be probably this fall, we'll evaluate all options as we always do. But undoubtedly there'll be interest from current partners and from others as well.
There are studios that have streaming services which used to only make content for their captive streaming services. But now, with consolidation playing a factor, many of those studios are selling the content to third parties and reducing their own content.
spending.
Yeah.
What implications does that have for your competitive advantage as a strategic supplier of content with no captive general streaming
service?
It's a correct description of the marketplace and a very good question. Our leading position as the big independent studio is really not diminished by this shift. And our main partnerships with the buyers, the streamers and talent, also very important, are healthy and strong with buyers. The buying market understands and appreciates that. Because we don't need to serve our own streaming platform. Our originals, our library offerings to buyers are always our best products. When we come to market with a TV original as an example, it hasn't already been passed over by an internal streamer, for example. And the marketplace knows that. As important, as I mentioned, the talent market knows that they can find.
the best home among all.
outlets. When they work with us, they're not just serving one.
platform. They that may or may not.
be able to accommodate their creativity. So while we may not be the only seller or really we say seller, but it's.
licensor. We may not be the only.
licensor in the content marketplace. We are clearly certainly the best.
one.
Great. Now I'd like to turn to Crunchyroll. How will Sony Pictures support the growth and competitive advantage of Crunchyroll going
forward?
Yeah, the growth of anime is exceeding most sectors, particularly, particularly with young audiences, Gen Alpha, Gen Z audiences. Crunchyroll has been active in the anime market for many, many years. Fifteen years or more I think. So we're very well positioned to come out on top of this in this market. As I mentioned, we're at over 17 million subscribers now and hyper focused on expanding that with better content, better and better content offerings, expanding our global reach into more territories, enhancing membership benefits and our collaborations across Sony, the one Sony initiatives. So as one example there, our recent announcement, the new joint venture with sister company Aniplex Hayate, which I mentioned in the talk, is dedicated to developing and producing anime content and it's a great boost for fans.
Another example in anime is our motion picture group's collaboration with Crunchyroll distributing theatrical movies like Demon Slayer, Infinity Castle coming up, which then come on to Crunchyroll. So the whole business can work in a very synergistic manner.
Great. Like to move to India. What is the strategic value of your network business in India and what are you trying to achieve
there?
Yeah, so India is a high growth market, right? The media and entertainment industry there is continuing to develop rapid economic, rapid population growth. We believe that the Indian market has great potential. We have a new CEO there. As I mentioned, our new MD and CEO Gaurav Banerjee comes to us from Star where he led the content initiative. And that team is very focused on strengthening content production, strengthening their distribution related partnerships as well as rebuilding and reorienting their growth strategy following the merger we attempted to do in the past. That includes investors in digital, that includes investment in SonyLIV, our streaming platform there.
As an example of the progress that's been made, ratings for our channels are really on the upswing since the new management have joined us and we've recently secured exclusive media rights for the Asian Cricket Council tournaments from 2024, when we did the deal all the way to 2031, which we anticipate will boost viewership and enhance the SonyLIV.
Now moving to new businesses, how will new businesses such as Alamo and other Experiences grow? And what are your KPIs for measuring the progress of those businesses? And finally, do you have any targets for specific dates in the.
future?
Yeah. So for U.S. experiences. Right. Which really Alamo is a foundational element of really means innovative and differentiated experiences, not theme parks per se, which it does for some other media companies. Alamo is profitable. It has strong growth potential. It's really a differentiated theater concept dine-in movies for film lovers. Alamo also has direct-to-consumer access to their more than 4.5 million loyalty members which offers a research base and an opportunity for added marketing to those subscribers. It offers cross-collaboration marketing as well with other SPE product properties. Two examples, Jeopardy! Bar Leagues in Alamo and interactive Jeopardy! at Alamo have proven to be very successful in our early trials of that and we're going.
to roll those out.
more. We also have Crunchyroll special screenings at Alamo. There's a lot of overlap between Alamo's audience and the Crunchyroll audience. Sony Pictures Experiences is also looking at new things, new investments, new growth. So there'll be more to come on that front, but no details as yet and no deadlines or timeframes yet.
Many investors believe that generative AI can significantly reduce production costs. Do you agree? Outside of production, what can AI do to improve your efficiency and what are the.
risks?
All technological tools. We expect that generative AI will be one that supports creators and supports employees too and realizing their visions and doing their jobs more efficiently. For us, we believe that the most appropriate use of generative AI is to speed up the tedious work and the routine work and to make more space for more and better creativity. Look, I think a way to put it is AI helps to unbundle low value and high value work. Everyone's got a bit of that, creators and executives and all of the work that they do. So we don't see generative AI as a replacement for creative talent, more as a tool to enable creativity. So yes, over time we will continue to explore the potential for AI. But really important, we need to safeguard our IP.
We need to safeguard and protect our talent, our data, our creative minds, so we've got very high standards and strict AI use policy guidelines. It's critical for the security and the integrity of our.
work. With regard to costs in AI.
It may reduce costs in some areas in the near term, like visual effects, like kids animation, but those even are likely to occur over time as the tools are perfected. They're not quite there.
yet.
Got it. Last.
Question.
Yeah.
As the new CEO of Sony Pictures, what keeps you up at night? And conversely, what gets you the most
excited?
Yeah. So it's really the thing. Kind of an answer to both is the anticipated failure or success of our content is usually what's keeping me up at night. It's painful to see something not work, but then it's really gratifying when it does. And then even as this. Another point here is as the industry's so dynamic, I'm constantly thinking about how quickly the industry is changing and how we can continue to stay nimble, how we can continue to stay.
Agile, but ironically, that's also the thing.
That excites me the most, the many potential growth opportunities that we have and figuring out strategies to achieve them. The pace of change really brings tremendous and endless opportunities for innovation and growth. And that and how much our film and TV resonate with audiences really makes the job very.
rewarding.
Great. We look forward to wonderful.
Things.
Thank you.