The ongoing war in Ukraine, geopolitics in China, and last summer’s Hollywood labor strikes—not consumer interest in theatrical movies—have resulted in a downturn in the production of new movies and TV shows across all distribution channels, including streaming video. Tony Vinciquerra, chairperson of Sony Pictures Entertainment, discussed these impacts at a recent business segment meeting.
The Habit of Moviegoing
According to Vinciquerra, the pandemic combined with geopolitical shifts has led to fewer theatrical releases and a limited selection for moviegoers. He emphasized that people got out of the habit of going to movie theaters but predicted a resurgence in the second half of this year. What really is happening is that people got out of the habit of going to movie theaters,
he said. In the second half of this year, you are going to see quite a resurgence of people going to theaters. It may not get back to the pre-pandemic level, but we’re pretty optimistic about the next couple of years.
Sony’s Strategic Focus
Vinciquerra reaffirmed Sony’s decision not to launch a branded streaming platform in the United States. He noted that while other platforms have seen increased cancelations and reduced content spending, Sony has chosen to focus on its IP and licensing rather than distribution: We’re not going to get into other businesses. We’re not going to get into general entertainment streaming services.
Economic Pressures in Streaming
The downturn isn’t only affecting the theatrical space. US streaming platforms have downsized content spending and faced higher episodic program cancellations. New TV series orders dropped from 1,221 programs in 2022 to 951 shows in 2023. Vinciquerra acknowledged this challenging environment: Clearly, it is a very challenging time.
Global Market Challenges
In China, US studio movie revenue has declined dramatically—from $3.3 billion in 2019 to $1.2 billion in 2023. Vinciquerra pointed out that while China is now allowing more US films, their market share has dropped from 43% in 2019 to 16% in 2023: The U.S. film share of the China box office has dropped by about 43% in 2019 to 16% in 2023.
Similarly, Russia was once a significant market but is now non-existent for US studios due to geopolitical tensions.
Sony’s Focus on Production
Sony’s decision not to enter the crowded general entertainment streaming market has allowed it to concentrate on producing high-quality content like Ridley Scott’s Napoleon for Apple TV+. The studio is maintaining its strategic direction with deals for future theatrical releases starring big names such as Brad Pitt and Scarlett Johansson.
Adapting with Animation and More
Sony Pictures Television continues to produce popular series like Cobra Kai and The Crown. The studio also plans new content like the animated series Spider-Man Noir: Sony Pictures Television will also produce the first animated TV series.
Follow Us
