Outgoing Sony Pictures CEO Predicts ‘Chaos’ in Entertainment Industry Over Next Two Years

Sony Pictures Entertainment CEO Tony Vinciquerra announced on Monday he would step down from his role to make way for Ravi Ahuja to succeed him as president and CEO. Under his leadership, Sony saw an effective turnaround in the studio’s fortunes, sidestepping the rush to streaming, doubling down on theatrical releases and leaning in to producing content for other companies to buy and distribute. 

He spoke to WaxWord on Monday on the tumultuous changes happening in entertainment and his tenure running Sony.

“The next 18-24 months are going to be — chaos is one word you can use,” he said. “There’s going to be consolidation, buying, sales, potentially bankruptcies. At the end of which, only thing is very clear: Demand for entertainment is going to be really strong.”

Vinciquerra, who is passing the reins to COO Ravi Ahuja, who will become SPE’s president and CEO in January, said he expects write-downs of cable companies and a merger of Charter Communications with a competitor in Europe. “That’s the beginning,” he said. “At the end of that, cable companies will be on much stronger footing. The business will be good. There will be a rough time in the next 18-24 months.”

The outgoing executive said Sony is better positioned to weather the storm than many of its competitors. “We are probably the most stable company in the business right now, given the strategies we chose many years ago,” Vinciquerra said. “The fact is that we got out of cable networks, [while] everyone else is trying to figure out what to do them” and are facing “significant negative decline.”

Sony has not launched a full-fledged streaming platform to compete with Netflix, Disney+ and others, preferring to focus on being an arms dealer that produces shows it then licenses to streaming networks.

The Japanese-owned entertainment conglomerate operates Crunchyroll, an anime-focused streaming platform which Vinciquerra called “the most-profitable streaming service…outside of Netflix.”

Here is what else Vinciquerra told TheWrap:

TheWrap: Will Sony be protected from the chaos?

Vinciquerra: Absolutely.

We’re not in the businesses that are going to be challenged. We don’t have to restructure to meet that. We haven’t had massive layoffs.

What can you say about Ravi Ahuja?

 The good thing is he’s smarter than I am. Good with people and has good IQ and EQ, I think.

Is he tech focused?

He will be. Our whole company will be technology focused. There is a big push from Tokyo to be – not on the bleeding edge, but we want to be right behind. And to be industry leading. 

Was the streaming pivot by your peers in the industry a mistake?

I don’t think it was a mistake. Eventually they will become significant profitable businesses. If you fell to earth from Mars in 2005, you’d want to get into the cable bundle business. It was an amazingly profitable business and easy to run. Today it’s gone the other way, dramatically. The streaming services will never get to point where they’re as profitable as that, but they will become profitable after this period of consolidation. The business that won’t get better is the cable network business. That business is on a negative path and will have to be dealt with. 

What do you plan to do now? 

I don’t know. I like fixing things. I like fixing companies. Fox was a big turnaround, bigger than this one. This was good-sized turnaround. Experience counts in these things. I will take a little time off too.

Alexei Barrionuevo contributed to this article.

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