Sony - Bigger Than You Know

[Music] I've been seeing all these comments saying that I should talk about Sony and a holy cow Sony has a lot going on so much going on in so many different areas there on the global 500 list at number 97 meaning in 2018 they were the 97th largest company in the world that spot is up from the past few years but actually quite a bit down from their top spot a few years before that and there can probably be a video at some point that focuses on the reasons behind these ups and downs but with so many different things happening with Sony the reasons are hard to pinpoint but even if they're lower than they once were they're still huge the revenue last year was over 77 billion dollars so I want to ask how do you think of Sony when I say the name what comes to your mind for me it's a TV or a blu-ray player or something like that maybe a pair of headphones but for many others watching this I imagine it's the PlayStation right Sony PlayStation now what if I were to tell you of that 77 billion dollars in sales in 2018 less than half of that was from everything I just mentioned everything involving Playstations and televisions and sound is not even half of their business well under half it's actually more like a third and I think that makes Sony a great topic for this series and a great company to talk about in general the beginnings of Sony take place in post-world War two Japan and I mean it started immediately following the war the official Japanese surrender date marking the end of the war was September of 1945 the date the company that would later morph into Sony was established was October of 1945 C during the war there was this Japanese man named Masaru Ibuka who worked for a team of engineers for a company that would test and produce new military equipment when the war ended that company shut down so e bucha in a team of 20 or so engineers set out to start a new company in tokyo now as you may know Tokyo and Japan in general was not in the best condition following world war ii at the very least we can say that these were unusual circumstances to be starting a business for example they original location was on the third floor of a department store that had visible bomb damage on the outside but it was still standing and obviously still functional in fact the impression I get anyway is that one of the main reasons the founders had for starting this new business was to help get Japan back on their feet come a part of a growing economy and help the people along the way so here we have a group of engineers looking to sell something in a very weak economy they had to figure out how they can use their skills in a way that would benefit the Japanese citizens their idea was to focus on radios for one their engineers so it's something they can handle and for two there was a huge demand for them we're talking about a country immediately following a massive war I would say that's a time to follow the daily news the war caused damage to a lot of people's radios so a major part of their business was to repair these radios the other part of their business was producing shortwave converters shortwave radios are pretty cool they can tune into different frequencies and receive transmissions from much further away essentially from anywhere in the world again immediately following a world war the people of Japan understandably were curious to hear what was going on around the world he bucha and his crew saw the demand for these shortwave radios so they made this shortwave converter that made regular radios into shortwave radios it's a perfect example of examining a specific area identifying their needs and using a set of skills to fill it these new adaptors had such initial success that they were featured in a popular Japanese news column I mentioned this because it further helped their popularity but also because a man named Akio Morita saw the article seee bucha and Morita had known each other during the war and reading about the success of the new product motivated him to contact Ibuka and eventually become his business partner in May of the next year the partnership formed a new company called ttk but keep in mind this was such a small company it's starting capital was the equivalent of $500 and it didn't do very well at first early on they made this rice cooker that just turned out to be a complete failure you can probably blame that failure on the lack of resources it was pretty simple just this would bowl with an electrical component at the bottom the rice would usually come out undercooked or overcooked depending on a bunch of factors I imagine they had trouble testing the products efficiently because there was a huge food shortage at the time and apparently the rice that they used for their tests was obtained on the black market in their first year and TT K's profit was three hundred dollars here's what I would say were there three biggest problems at the time for one they were selling in a weak economy I mean if no one has money to buy anything how can you sell anything for two if they had very little money or physical resources it's hard to develop and produce things with no money in three they struggle to find a core product something that you can build your business around and it certainly wasn't that rice maker by 1950 things were looking better for one that the economy was getting better it was five years removed from the war the people of Japan had more money and we're looking to spend more as far as their resources again were a few years into the business still getting by and growing along the way Plus Marita's father started providing some money as far as finding the right product in 1950 they introduced the first Japanese tape recorder if you lived in Japan in 1950 and wanted a tape recorder you'd be contacting ttk and they did an effective job in making people want the tape recorder by advertising all of its uses in 1955 they further took shape when they started producing transistor radios one of the first to do it and they became known for it the company was still called ttk at this point but decided to call the radio Sony after three years the radio was such a success in the name Sony became so popular they decided to make that the name of the entire company that's the first decade of Sony a rough start but it's easy to see how they got involved in audio and electronics so at this point I would normally want to continue the story and talk about how they got involved in different products and industries and how they developed but it's a little difficult with Sony there's over 60 more years to cover and over that time they've expanded into one of the world's largest companies they're in virtually every country and have a significant presence in multiple industries they have all these subsidiaries dealing with different business it's just impossible to talk about all of it in detail in a video like this they have nine separate reporting segments most of which can easily have their own videos so for now let's look at them from a higher level and get at least a basic understanding of what Sony does today their biggest segment is the one that you would expect game and network services coming in at 22 percent of their revenue this is everything that has to do with PlayStation the consoles the games the network services everything for research and development - customer service they've been selling about 20 million Playstations every year they're second largest segment is financial services almost 14 percent of the revenue in 1979 they formed a joint venture with the insurance company Prudential it was called Sony Prudential Life Insurance but then in 1991 they changed the name to Sony Life Insurance and in 1996 became 100% owner so that's part of the segments of the company along with Sony bank they have an actual bank along with a bunch of other financial services the third largest segment is home entertainment in sound this is what I first thought of when I heard Sony that you're 65 inch 4k TVs and blu-ray players Walkmans headphones and everything along those lines they sell about twelve million televisions every year their next largest segment is labeled as pictures providing eleven point four percent of their revenue here we're talking about TV and movies in 1989 they acquired Columbia Pictures Entertainment which is a big production company cost them three point four billion dollars you see their name before a lot of movies that lady the holding her arm in the air when you see all those different logos before movies a lot of them are owned by Sony like Tristar they have that horse with the wings coming at you and then there's Sony Pictures animation and just a lot of subsidiaries they own that have to do with the production and distribution of movies just here's an example did you know this movie spider-man into the spider-verse well it's produced by Columbia Pictures and Sony Pictures animation and distributed by Sony Pictures releasing of course all owned by Sony and I only talked about movies here but they do the exact same thing for TV this is one of those segments that you can really dig into but let's go on to number five semiconductors in the 1980s they started making electronics components for other companies and today it's almost ten percent of their business next up music it's nine percent of their business there's a lot going on here too they're responsible for the distribution of both physical and digital music they got involved with this very early on in 1968 they formed a joint venture with CBS called CBS Sony records where they shared 50/50 ownership in 1988 they became 100% owner and three years later changed the name to Sony Music Entertainment and aside from that they also deal in music publishing which has to do with who owns the rights to songs and licensing and royalties and everything like that in 1995 they formed a 50/50 joint venture this time with Michael Jackson called sony/atv music publishing which today is the world's number one music publisher in 2016 Sony became the full owner of it next is mobile communications 8.2 percent of revenue this is smart phones and tablets in 2001 Sony Ericsson was formed yet another joint venture this time with the Swedish company Ericsson and then Sony bought Ericsson share in 2012 and renamed it Sony mobile communications they sold over 12 million smartphones in 2018 next is imaging products and solutions at 7.4 percent of their revenue this includes cameras and lenses along with video cameras for consumers and professionals projectors and even a bunch of medical devices used for imaging in 2013 they formed a business with olympus called sony olympus medical solutions and the remaining 4.6 percent is labeled under all other and includes everything else this is disc manufacturing is a big one it used to include computers but then they got rid of that in 2014 and it used to include batteries but they got rid of that in 2017 so that's it that's where all their money came from in 2018 and you have to admit there's more going on here than you thought isn't there one other thing that may help prove that sony is bigger than you know i've been showing their revenue broken down by segments but what about the revenue broken down by region the greatest portion of their sales comes from japan followed by euro in the US which are virtually tied and followed by asia-pacific in China this proves a couple of things it shows how that little radio repair business in post-war Tokyo was done pretty well in expanding their reach over the years but it also shows how there's a lot going on with Sony outside of your area let me know in the comments what do you think of Sony they had such modest beginnings and seemingly good intentions and we're able to turn it all into something so big constantly expanding into new products and new locations and new industries to a point where today they're one of the largest and most diverse companies out there and let me know if you'd be interested in a video that takes a more in-depth look on some of these segments because there's a lot more to talk about and anything else you have to say about Sony the PlayStation or whatever else leave it in the comments I'd like to hear what you have to say thank you for watching [Music]

Channel: Company Man

Views: 989,384

Rating: 4.9219904 out of 5

Keywords: Sony, Playstation, Movies, Film, Photography, Cameras, Electronics, TV

Id: LpMVGJlWnNk

Length: 12min 7sec (727 seconds)

Published: Wed Feb 20 2019