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During 1988 and 1989 Sony, the company that had for many years produced and marketed a range of audio-visual products which included the world's first transistor radio and the Walkman, purchased Columbia Studios and CBS Records. The acquisition of these two US-based companies was accompanied by a flurry of corporate announcements in which Sony declared that it was pursuing a new strategy, referred to as synergy. No longer would Sony simply be known as a manufacturer of technology, it would now be a'total entertainment'company that provided both the hardware (compact disc players, video-recorders, televisions) and the software (films and music) that featured on them. Like many other media and communication corporations, Sony had recognized that the links between the manufacture of technologies and the production of sounds, words and images had always been close (noone would buy a Walkman or compact disc player without the recorded music or words to play on it) and they now intended to bring these connections even closer by putting them together within one corporation. At the same time as creating these hardware-software connections (or'synergies') Sony would-proclaimed company founder Akio Morita-forge new links between cultural texts, by bringing together moving image, music, written word and computer programming in new products.

Just over five years later, things were not looking as positive as when this strategy was first announced. The Columbia/Tri Star Studios division (renamed Sony Pictures Entertainment) had incurred large losses and the company had written off a deficit of Y265 billion ($2 …