■ Your Valuable Feedback

Thank you for the extensive feedback I received from around the world to my first blog post, "Sony and the Planet Earth." My message there was simple: The Environment is not something for us to consider only in the context of our corporate structure or business operations. The Earth is the foundation of all, and within that exists the human society, and within that, there is Sony. The insightful feedback and comments I received from all of you, reaffirmed to me the great level of awareness there is regarding this concept throughout the Sony Group.

I was also informed by one of our colleagues at Sony Pictures Entertainment (Japan) that the film version of "Wolf Totem," which I mentioned in my first blog, is distributed in America and select regions through Sony Pictures Entertainment, and that BD/DVD sales in Japan are handled through SPEJ's Home Entertainment division.

On my second blog post discussing the interaction I had with Sony co-founder Morita-san, some of you wrote to me to share your own precious experiences with Morita-san.

Again, I am very grateful for your responses which gave me many fresh insights. I look forward to hearing more from you.

■ Highest Profit Level in 20 Years

On April 27, we announced our full year financial results for FY2017. With operating income (734.9 billion yen) and net income after taxes (490.8 billion yen) both achieving record highs, we were able to close out the final year of our second mid-range plan in fantastic shape. I want to thank each and every one of you again for your extraordinary contribution.

It is also the first time in twenty years that we have set a new record for consolidated profit.

■ Audio's First Revenue Increase in 20 Years

I would also like to point to another milestone that's been twenty years in the making, and that is a revenue increase in our audio business. I have previously stated that considering the wealth of technological strength and expertise that we possess in this area, the scale of our business is relatively small. While the business was helped by the tailwind of positive exchange rates, sales increased 20% year-on-year to 270 billion yen in FY2017. Of course if you go back 20 years, to 1997, our audio business generated sales of approximately one trillion yen.

While it is important to analyze the reasons behind this increased profitability, it is equally crucial to ask ourselves why our audio business continued to contract for 20 consecutive years. I've listed a few possible factors below.

　1999: Release of Napster
　2001: Launch of iPod and iTunes
　2003: Release of iTunes Music Store
　2005: Release of YouTube
　2007: Launch of iPhone
　2008: Release of Spotify
　2014: Launch of Amazon Echo
　2015: Release of Apple Music
　2016: Launch of AirPods

These changes came about in conjunction with the rise of the internet, but I would like to refer you back again to Morita-san's message from 25 years ago, which I mentioned in my previous blog.

The key theme of my second blog post was "a long-term perspective." This is an expression that Executive Deputy President Tomoyuki Suzuki also uses consistently. If Morita-san's sense of urgency back then was based on his foresight of the future impact of the internet, then what should we be looking ahead to and acting on today?

■ Megatrends in Society and Technology

The changes brought about by the internet have had a major influence, not only on our audio hardware business, but on Sony Music and our music business as a whole. They have also greatly changed our lifestyles and the way we enjoy music in our daily lives. We must thoroughly analyze such megatrends in society and technology as we move forward.

Looking ahead, we will hold our Corporate Strategy Meeting and IR Day on May 22. The next three years of our forthcoming mid-range plan will represent a great challenge, and it is vitally important that we engage in this plan with a long-term perspective as well.