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SONY INTRODUCES NEW CHIEF AND NEW PRODUCTS

Howard Stringer Wants Tighter Links Between Electronics and Entertainment

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NEW YORK (AdAge.com) -- In an apparent nod to convergence and consensus, Sony Corp. made a surprise announcement today, naming its U.S. chairman-CEO, Howard Stringer, to chairman-CEO of all Sony Corp.
Photo: AP
Howard Stringer, who becomes Sony's chairman and CEO in June, is the first non-Japanese to ever hold the post.
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Mr. Stringer, 63, will be the first non-Japanese executive to lead the media and electronics giant in Sony's 59-year history when he takes the reins in June.

Product integration
At a press conference in Tokyo this morning, Mr. Stringer told reporters the company would more closely integrate the marketing of the company's electronics and entertainment products, according to the Associated Press.

A front page report in the Feb. 28 issue of the print edition of Advertising Age chronicled how Sony has fallen behind in both its products and marketing in recent years. Most notably, it has been eclipsed by Apple's success with the iPod system -- which stands in stark contrast to earlier years when Sony's Walkman and related products were the leaders in their field.

Once led CBS
Mr. Stringer, a former journalist who led CBS back to glory in the early 1990s, is well-known for his charm, diplomacy and ability to make the traditional silo businesses at Sony work together.

"It's a little early to read too much into it ... but it seems to point to a real attempt to unify these divisions and attempt to create a much more clear and discrete message about what the company stands for overall," said research director Michael Gartenberg of Jupiter Research.

Struggled to innovate
That clear message has been missing as Sony struggled during the past few years with its own lack of innovation in electronics and difficulty cross-pollinating among divisions, as well as increasing competitive and financial pressures. The once powerful Sony brand and product portfolio has ceded both product prowess and market share to competitors such as Apple Computer and Samsung Electronics, especially in new hardware categories such as MP3 players. The electronics-division profits dropped 23% in its recently released results for the October-December quarter. Traditionally strong Sony categories lke TVs have seen share erode. Five years ago, Sony stock was $157; today it trades at less than $40.

The marketer's divisions are Sony Electronics; Sony Computer Entertainment; Sony Pictures Entertainment; and Sony Music, part of Sony BMG Music Entertainment.

Sony Electronics recently severed ties with its longtime ad agency, WPP Group's Y&R Advertising, and initiated a review for its $100 million advertising account.

Photo: AP
As Sony introduced its new CEO in Tokyo on Monday, it simultaneously made a splashy new product announcement for its new Handycam digital video camera in Seoul, South Korea.

In the management shake-up, current Chairman-CEO Nobuyuki Idei, who came from a non-engineering marketing background, will step back to become chief corporate advisor; Sony President Kunitake Ando will be replaced by Ryoji Chubachi, currently executive deputy president.

Industry insiders surprised
Mr. Stringer's ascent to the top surprised industry insiders, many of whom expected Ken Kutaragi, founder of Sony's immensely popular PlayStation video-game console and president-CEO of Sony Computer Entertainment, to get the top job. Mr. Kutaragi will continue to lead the games division, but resigned from the Sony board.

"There certainly was a lot of market expectation that Ken would get the job. But maybe they need some new thinking at the top corporate level with a look to unify the company," Mr. Gartenberg said. "The same personality that made PlayStation successful might have been considered at the corporate level to be too radical."

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