Sony Pictures Entertainment saw profit spike in fiscal Q3 by 57% to $281 million, thanks largely to a thriving global content licensing business.

The Sony Group Corp. unit, which makes up Sony’s film and television production operations, experienced a 5% increase in revenue from Oct. 1 through Dec. 31, to $2.47 billion, despite lagging ticket sales at the global box office. Sony's earnings release can be found here. 

Sony is on the forefront of the so-called “arms dealer” business strategy. 

While studios including The Walt Disney Co., Warner Bros. Discovery, Paramount and NBCUniversal have opted to invest billions of dollars in the creation of their own direct-to-consumer streaming services, Sony has stuck fast to licensing its films and shows to other linear and digital platforms, taking advantage of external cable networks, satellite and streaming services to broadcast its content.

One example: Sony has a lucrative licensing arrangement with Netflix to stream its theatrical releases during the pay-one period, giving Netflix the first seat at the table for Sony films. 

Just last October, Sony’s Jennifer Lawrence-led rom-com No Hard Feelings arrived on the streamer after its theatrical release, charting No. 3 among Netflix’s most popular English films in its second week on the rankings, with 22.7 million hours viewed. 

Sony’s Oscar-nominated, $691 million grossing super-hero flick Spider-Man: Across the Spider-Verse charted similarly well in October, debuting at No. 4 on Netflix’s weekly rankings with 20.1 million viewing hours.

Also making for higher numbers was an increase in revenue for Sony’s acquired anime-focused streaming service, CrunchyRoll, which grew to reach more than 13 million paid subscribers as of the end of December, according to Sony’s financial results.

Sony's corporate group said CrunchyRoll has expanded its subscriber base at an average pace of 23% a year since its acquisition from AT&T in 2021, and on its earnings call, Sony stressed the importance of maintaining that expansion.

Crunchyroll and GSN have teamed up to launch a new Crunchyroll free ad-supported streaming television channel that will promote anime 24 hours a day.

The new channel launched Wednesday on LG Channels, The Roku Channel and Vizio WatchFree Plus. It will be added to Amazon Freevee on Oct. 17.

Crunchyroll and GSN are both controlled by Sony Pictures Entertainment.

“Crunchyroll Channel is a gateway to the world of anime where we will guide viewers to discover new worlds, new stories and new characters,” Rahul Purini, president of Crunchyroll, said. “And thanks to our distribution partners at launch, millions of fans have easy access to the medium that is taking the world by storm.”

Also Read: AMC Networks Adds to Streaming Portfolio with Sentai Anime Acquisition

The network will be programmed with series dubbed in English at launch. 

Series available at launch include Horimiya, Ranking of Kings, Moriarty the Patriot, PSYCHO–PASS, Arifureta, Sugar Apple Fairytale, To Your Eternity and Code Geass. 

Going forward, blocks will be scheduled for viewers to sample the wide range of anime being created from Japan.

New and premium anime content will remain on Crunchyroll’s SVOD and AVOD services.

Also Read: Crunchyroll News Relaunches With Expanded Coverage and Features

“GSN is thrilled by the massive response from our platform partners for this channel, which is a testament to Crunchyroll’s brand and library.  We are grateful to bring this channel to market,” said Tim Carry, executive VP of distribution for GSN, 

Sony is making the smart play by not launching a “Sony Plus.”

That’s the contention of LightShed Partners analyst Richard Greenfield, following the studio’s announcement of a new output deal with Disney. The agreement delivers to Disney Plus rights to Marvel Spider-Man films and other Sony movies, after they complete their “Pay 1” window through a separate agreement announced several weeks ago with Netflix. 

The pact, which runs from 2022-2026, gives Disney Plus rights to the Marvel titles it doesn’t already own (aka Spider-Man), about nine months after their theatrical run. It’s the window that was previously confined to ad-supported cable and broadcast TV.

The deal is reportedly worth hundreds of millions of dollars of its entire span.

Also Read: Netflix Ups the Ante with Latest Deals 

“Every studio exec should be questioning whether competing in SVOD ‘really’ makes sense vs. being an arms dealer,” Greenfield tweeted Wednesday, applauding Sony’s deal. 

Indeed, Sony once had grand plans about building an OTT ecosystem based on its PlayStation console business. But before it even ditched its quest to be a virtual pay TV provider (RIP PlayStation Vue), it ran away from the SVOD biz, too, selling Crackle to Chicken Soup for the Soul in 2019. 

In earlier remarks made at a Variety event on Monday, Greenfield elaborated on the competitive nature of the SVOD business. Most media conglomerates don’t have the scale—or the will and commitment—to succeed in it right now, he said. 

Also Read: Comcast Launches Disney Plus and ESPN Plus on X1 and Flex

“Everything Disney is doing illustrates that the one thing they have learned in the first 12 months of Disney Plus is that the resources to be successful are far, far beyond what they initially anticipated,” Greenfield said. “Everyone is going to have to learn this."

“The way to win in the streaming wars is to be incredibly focused, put the consumer first and stop worrying about your legacy business, stop worrying about breaking windows,” he added. 

Of course, Greenfield’s advice doesn’t necessarily pertain to Sony, which has found a way to profit from keeping windows intact. 

“This groundbreaking agreement reconfirms the unique and enduring value of our movies to film lovers and the platforms and networks that serve them,” said Keith Le Goy, president of worldwide distribution and networks for Sony Pictures Entertainment. “We are thrilled to team up with Disney on delivering our titles to their viewers and subscribers. This agreement cements a key piece of our film distribution strategy, which is to maximize the value of each of our films, by making them available to consumers across all windows with a wide range of key partners.”

Sony Pictures Entertainment and Netflix recently agreed to a groundbreaking licensing deal that will give Netflix an exclusive window on Sony theatrical releases. This is clearly a boon for both parties, with Netflix scoring more of the latest entertainment titles and Sony locking in access to the massive Netflix subscriber base. And there are likely to be promotional synergies too.

Social video has helped SVOD companies excel in the streaming wars, engaging current audiences and accelerating subscriber growth. According to a recent report from social video analytics firm Tubular Labs, U.S. viewers spent 116% more time watching SVOD content on social video in January 2021 compared to January 2020. Tubular’s analysis shows that of the SVODs’ U.S. audiences, 67% are 13-34 years old, a coveted demographic. (A note about methodology: This data is based on the U.S. viewing audience, including YouTube and Facebook. The minutes-watched data is based on views of at least 30 seconds.) 

Also Read: Netflix Ups the Ante with Latest Deals

Of the SVOD platforms Tubular measured, Netflix dominated for U.S. cross-platform unique viewers in January of this year, with 93.2 million. That bodes well for Sony, given that Netflix will surely use its social video muscle to promote new Sony titles as they become available to stream. 

That said, Sony also already has a strong social video strategy.

Sony Pictures utilizes multiple social video platforms to promote its content, but according to Tubular, YouTube is a primary driver of views for the company, netting 796 million from over 1,100 video uploads across various Sony Pictures-owned accounts (that includes Sony Pictures’ global creators and other owned properties such as Sony Pictures Classics). 

The top YouTube video for Sony Pictures’ U.S. accounts across the last year is the official trailer for Monster Hunt, which was posted in October and has generated 11.8 million views, 5.5 million of which occurred within the first 30 days, according to Tubular’s analysis. Meanwhile, the most-watched Netflix video hasn’t even been up for a full month yet: The official trailer for The Mitchells vs. The Machines, posted on March 31, has racked up over 18.9 million views so far. 

Trailers are the bread and butter of Sony Pictures’ social video strategy: Of its top 15 YouTube U.S.-focused videos by views in the last year, only two aren’t teasers or trailers: “Puppy! A Hotel Transylvania Short Film,” from Sony Pictures Animation with over 3 million views, and “The New Spider-Man Title is…” reveal with 2.4 million views. 

This brings us to one specific area where Sony might take cues from Netflix: the diversification of content types in its social video mix. Although both companies focus heavily on teasers and trailers for their YouTube presences, Netflix in particular tends to offer more full-fledged content: While many of Netflix’s top 15 YouTube videos by views are trailers, it's also posted full episodes of Our Planet, which have generated top view counts. 

Also, of the top SVOD platforms that Tubular examined, Netflix has the most format diversity across types of content posted to Facebook.

For example, on Facebook, Netflix shares short clips from shows and movies, such as a 17 Again clip that was posted in early January and is the No. 1 Facebook video by views (55.6 million) for Netflix in the last year, 19 million of which occurred in the first week. Another top video is a collection of “Floor Is Lava Falls,” with 29.7 million views, and this interview with Goldie Hawn and Kurt Russell, which has generated 8.8 million views. Meanwhile, Sony Pictures’ most-watched Facebook videos are all trailers and teasers. 

As Sony Pictures content comes to Netflix under the new licensing deal, it’s easy to envision how the streaming giant can push forward with increasingly engaging ways to promote Sony fare.

Signaling that it’s still in the business of licensing content from the major studios, Netflix on Thursday announced a deal with Sony Pictures Entertainment to acquire exclusive first pay window rights to Sony theatrical titles starting with the studio’s 2022 slate.

The deal, which was for an undisclosed sum, also gives Netflix first dibs on any movies Sony chooses to distribute directly for the streaming market. 

If anyone was looking for a clear indicator that a "Sony+" won’t be launched anytime soon, this is probably it. 

Also Read: Are the Major Streaming Services Finally Running Out of New Shows?

Netflix outbid Lionsgate premium programmer Starz, which still gets Sony titles after theatrical and home entertainment windows through the end of 2021. 

Notable 2022 Sony releases include Morbius, which stars Jared Leto as a biochemist who turns himself into a vampire following a flawed attempt to cure himself from a rare blood disease; Uncharted, a video game title adaptation, directed by Ruben Fleischer, and starring Mark Wahlberg and Antonio Banderas; an adaptation of Delia Owens’ Where the Crawdads Sing; and the action film Bullet Train.

Perhaps even more notable for Netflix is the fact that the Sony deal puts it back into the Marvel business, following Disney’s decision several years ago to pull all its digital wares back into Disney Plus. Sony controls the theatrical fates of Marvel characters including Spider-Man and Venom. In fact, Morbius is a Marvel co-production, too. The Marvel Cinematic Universe remains the top driver of box office business, according to Box Office Mojo.

For 2019, the last “normal” box office year before the ongoing pandemic, Sony Pictures controlled about 11.7% of the U.S. box office, ranking behind the dominant Disney, Warner Bros. and Universal.

“Sony Pictures is a great partner, and we are thrilled to expand our relationship through this forward-thinking agreement,” said Scott Stuber, head of global films for Netflix, in a statement. “This not only allows us to bring their impressive slate of beloved film franchises and new IP to Netflix in the U.S., but it also establishes a new source of first run films for Netflix movie lovers worldwide.”

Netflix famously grew its market capitalization on the backs of shortsighted media companies, then smartly pivoted into an aggressive investment into original content, rightly sensing that major studios including Disney, Warner Bros. and Universal would eventually launch their own direct-to-consumer streaming services and withhold their content for those purposes.

Now that Disney Plus, HBO Max and Peacock have arrived, and the major conglomerates have largely silo’d off their movies for their own respective services, Netflix has an advantage as the only major service to offer a diversified content portfolio. 

“Netflix has been a terrific partner as we continue to expand our relationship,” added Keith LeGoy, president of worldwide distribution and networks for Sony Pictures Entertainment. “At Sony Pictures, we produce some of the biggest blockbusters and the most creative, original films in the industry. This exciting agreement further demonstrates the importance of that content to our distribution partners as they grow their audiences and deliver the very best in entertainment.”

A coalition of media companies has been formed to use their storytelling power to address the nation’s mental health challenges.

ViacomCBS units including MTV Entertainment Group, The Walt Disney Co., Amazon Studios, NBCUniversal, Sony Pictures Entertainment, and Starz are among those getting involved in the Mental Health Storytelling Summit, which will take place in May.

“The mental health crisis is the silent pandemic that has been on an alarming rise for the last decade and we are so thankful to our partners for joining us in this coalition to unleash the power of storytelling to help shatter the stigma around mental health,” said Chris McCarthy, president of MTV Entertainment Group. “As storytellers, we have the opportunity to represent the continuum of mental health and empower people to help themselves and each other, because mental health is health.”

The effort was created in partnership with the Annenberg Inclusion Initiative at the University of Southern California.

The media companies, as part of the industry advisory council, will work with expert groups including Active Minds, the American Foundation for Suicide Prevention, Annenberg Inclusion Initiative, Born This Way Foundation, Entertainment Industries Council, National Action Alliance for Suicide Prevention, National Alliance on Mental Illness, National Council for Behavioral Health, SAVE (Suicide Awareness Voices of Education), The Boris L. Henson Foundation, The Jed Foundation, The Trevor Project, Vibrant Emotional Health (administers of the National Suicide Prevention Lifeline), Dr. Jessi Gold, Dr. Joy Harden Bradford, and Dr. Michael Lindsey.

“How mental health is portrayed in film, television and other popular media deeply impacts the public discourse about and perceptions of people with mental illness,” said Glenn O’Neal, Chief Communication Officer at the National Alliance on Mental Illness. “We’re proud to collaborate on this project so that the diverse experiences of people with mental health conditions are accurately represented, reducing stigma and discrimination.”  

Industry leaders, creators, and celebrities will kick off this collaboration at the Mental Health Storytelling Summit, which will include inspiring conversations, case studies and workshops. 

The coalition will also unveil a comprehensive Mental Health Media Guide which provides best practices and evidence-based recommendations to support storytellers at any phase in the production process, across topics and genres.

“It is a privilege and responsibility to help shine a light on the importance of mental health through stories and shows including Grey’s Anatomy, black-ish, Love, Victor and A Million Little Things that run on our broadcast networks and streaming platforms,” said Craig Erwich, president, ABC Entertainment and Hulu Originals. “Feeling seen and understood is a powerful step toward seeking solutions, and we will continue to lean into the power of our storytelling and platforms to show support, raise awareness and change the narrative around mental health.”

Sony Pictures Entertainment said it has tapped Hulu CEO Mike Hopkins as chairman of Sony Pictures Television, while Fox Networks Group chief operating officer Randy Freer will move to the streaming service as CEO.

The moves come as a surprise. Hopkins has been with Hulu since 2013 and has steered the company to acclaim for its original programming – its Handmaid’s Tale won the 2017 Emmy Award for Best Drama – and comes just months after the service embarked on an aggressive campaign to add live TV to its mix. 

The move will reunite Hopkins with his former boss at Fox Networks Group Tony Vinciquerra, who now heads Sony Pictures Entertainment as chairman and CEO.

“I’ve known Mike for years and can think of no better person to lead our television businesses during a time of such extraordinary evolution and opportunity,” Vinciquerra said in a statement. “Mike is a proven and innovative leader who has played a key role in redefining today’s television landscape, both for consumers and for how content producers reach them.  We are thrilled to have him at SPE to work alongside our deep bench of talent and lead our studio to even greater heights.”

Hopkins fills the spot left vacant when SPT chief Steve Mosko stepped down last year. Hopkins will oversee all television production, distribution and marketing operations globally for the studio, as well as SPE’s media networks business.  He will officially start in late November and report to Vinciquerra.

 “Tony has long been a colleague and mentor of mine, and I’m really excited to join him and the rest of the talented team at SPE,” Hopkins said in a statement.  “There is a tremendous opportunity to build on SPT’s momentum globally and I look forward to working with the team to realize that potential.  I want to thank Tony and Kaz for this incredible opportunity.”

Sony Pictures Television has produced top series like Breaking Bad, Better Call Saul, The Blacklist, The Goldbergs, Shark Tank, Preacher, Outlander, as well as shows for digital platforms like as One Day at a Time for Netflix.  SPT also produces first-run syndicated programs such as Wheel of Fortune and Jeopardy!, and network daytime serials The Young and the Restless and Days of Our Lives.

Freer, who has been president and COO at Fox Networks since 2013, will be based in Lons Angeles. His new job is effective Monday.

“We want to thank Mike [Hopkins] for his leadership in steering Hulu to its current era of growth and success,” Hulu’s board of directors said in a statement. “Randy has a unique knowledge of Hulu and expertise building consensus among its owners, and an excellent track record leading a complex organization at the nexus of the television business. There’s no better candidate to lead Hulu as it embarks on its next chapter.”

At Fox Networks Group, Freer oversaw revenue, distribution, operations, business development and strategy for all aspects of the Fox Television Group, FX, FOX Sports and National Geographic Partners, and was responsible for rights acquisitions and team and league relationships on behalf of FOX Sports.

Prior to being named to his current position, Freer served as co-president and COO, Fox Sports Media Group, where he focused on growing and enhancing Fox Sports’ portfolio of league, conference, and team media rights.  In recent years, he oversaw the negotiations that led to long-term agreements with the National Football League, Major League Baseball, NASCAR, and the USGA, as well as with the Pac-12, Big 12, and Big East Conferences. Freer also played a significant role in Fox’s landmark acquisitions of the World Cup and the Ultimate Fighting Championship (UFC).  He also was at the forefront of the acquisition of true[X], an engagement and on-demand marketing company which serves as a key component of FNG’s non-linear advertising products and services.

“Hulu is at the center of transformation in entertainment,” Freer said in a statement. “Hulu’s management team and employees have positioned Hulu to be a leader in defining the future of content creation, distribution and monetization – all while putting the viewer first. I’d like to thank Hulu’s Board for this exciting opportunity.”