Sony admits consolidation quest

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Sony Corp. acknowledged for the first time it is in discussions with media agencies for a possible $1 billion global consolidation of its media buying and planning business.

Last week, a Sony executive familiar with the matter characterized the meetings as a "high-level discovery process." According to advertising executives involved in the process, Sony has created a task force of executives from its five divisions to spearhead the initiative.

The task force, minus Sony PlayStation representatives, met during the week of Sept. 3 with executives from Bcom3 Group's Starcom MediaVest Group, WPP Group's MindShare and Media Edge, Publicis Groupe's Zenith Media, Interpublic Group of Cos.' Universal McCann and Omnicom Group's OMD. The discussions, which took place at Sony's Madison Avenue headquarters in New York, centered on the North American portion of a larger global bundling. Although a next step in the process was not announced, Gary Podorowsky, senior VP-strategy, planning and marketing, met in follow-up meetings with agencies Sept. 10, a day before the terrorist attacks.

INCONCLUSIVE

The five Sony companies involved are: Sony Broadband Entertainment, Sony Computer Entertainment, Sony Electronics, Sony Music and Sony Pictures Entertainment.

Agency executives described the recent New York meetings as highly formal and inconclusive. The Sony side of the table was filled with a large number of executives, while agencies brought in only a handful of top executives. One executive described the atmosphere as intimidating.

Discussions about the possibility of global media consolidation began in earnest late last year and have inched along slowly (AA, July 2).

"It's an exploratory process, not a review," the Sony executive said, adding that it's a logistical challenge just to get all parties to the process coordinated.

Media Edge has the most to lose if WPP doesn't come up with a plan to hold onto the mega brand. Sony Electronics has been pleased with WPP's Y&R Advertising, New York, and Irvine, Calif., the company's creative agency. However, the departure of Linda Srere, president of Y&R New York, and agency volatility could prove problematic. If Ms. Srere's exit is followed by other high-level defections, it could be cause for concern, according to executives close to the marketer.

Sony Corp. of America spokesman Howard Polskin did not return phone calls at press time.

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