Sony in red from film foray

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The Independent Online
Problems at Columbia, the US film studio bought five years ago for $3.4bn (£2.2bn), continued to dog Sony, the Japanese electronics group, in the three months to December. The group confirmed yesterday that a change in accounting policy would lead to a pre-tax loss for the year to March of 205bn yen (£1.34bn).

The loss was flagged in November, when Sony said it was writing off Y265bn from the value of its controversial diversification into the Hollywood film industry.

The announcement, which followed a well-publicised row between Matsushita, another Japanese electronics group, and the management of MCA, its US entertainment subsidiary, highlighted the problems faced by the Japanese in adapting to the different culture of their Hollywood acquisitions.

Sales from Sony's film division fell 11 per cent in the three months to December thanks to the appreciation of the yen against the dollar and disappointing box office results from several films. The decline more than wiped out better sales from records, which benefited from high sales of albums from Mariah Carey and Pearl Jam.

The poor performance from films also diluted higher sales from all of Sony's electronics businesses, especially televisions, which were boosted by the success of wide-screen TVs in Japan. Car stereos also sold well in the quarter and sales of CD players and the Walkman continued to grow.