With its former focus on software wholesaling and its makeover as a technology investment holding company, Japan's Softbank has rarely been sexy enough to make the front pages of the entertainment press.
Now the company's mooted bid for DreamWorks Animation has changed that overnight.
The company's expansion over the past decade into telephony and broadband Internet provision - both in Japan and in the U.S. - gives it the physical infrastructure from which to expand massively into entertainment software.
That's a classic case of having a pipeline and then seeking the content to deliver through it.
Owning a mini-studio with big brand name content that can be propagated into millions of homes, and onto tens of millions of handheld devices, is not a difficult stretch of the imagination. Asian conglomerates love that kind of logic. And Softbank has over 100 million subscribers worldwide.
Plus, for a group of Softbank's size and inclination, DWA would be a steal. The reported $3.4 billion price tag being discussed, compares with DWA's Friday market cap of $1.89 billion. Either way, that's less than the $4.6 billion first day capital gains Softbank enjoyed last week from the IPO of Chinese e-commerce giant Alibaba, in which it owns a 32% stake.
On the side-lines of Hollywood until now, Softbank is very much a known quantity on Wall Street, as is its founder and CEO Masayoshi Son.
His career has known some close calls, but following the Alibaba flotation last week, Son was again crowned by Bloomberg as the richest man in Japan.
Two years ago Softbank burst into the spotlight in the U.S. with its acquisition of an 80% stake in laggardly telecoms and Internet giant Sprint Nextel, for which it paid $21.6 billion.
Six years earlier it had made a similarly audacious takeover of Vodafone Japan, a cell phone group which trailed the market leaders NTT and KDDI. Renamed Softbank Mobile Corp, it clawed its way back into shape by being culturally different from the incumbents. (A month after the Fukushima disaster Softbank cheekily offered a phone with a built-in Geiger counter.)
Through price cutting, good cost management and for a couple of years being the only network in Japan to offer Apple's iPhones, it managed to grow revenue per subscriber in an otherwise flat market. Profits between 2006 and 2013 grew five-fold.
These days NTT DoCoMo and KDDI both sell iPhones, but controlling DWA would likely give Softbank Mobile (and Sprint) another angle. Conceivably it could have first call on "Shrek," "Kung Fu Panda" and "Dragon" phones and software. According to Alcaraz Research, Softbank is already the world's top grossing publisher of mobile games, the segment of the games market that is growing faster than either consoles or online.
Japanese companies have a very poor track record of acquisitions in the U.S. But there is reason to think that Softbank may be different.
In business-conservative Japan where most decisions are made by committee, Son enjoys status as a maverick, American-style entrepreneur. And he has the social media following to prove it.
And, in truth, has Son never been far away from California's twin sisters Silicon Valley and Hollywood. Steve Jobs and Michael Ovitz were both close associates. Son recently even took the 'Ice Bucket Challenge.'
Born in Japan of Korean descent and spending his early years in considerable poverty, Son started school in the U.S. age 16. He later attended University of California at Berkeley. Showing considerable entrepreneurial flair, he made two fortunes before he was 20 - one in language translation units, the other in video game devices.
After early adventures in software, computer publishing and trade shows, Softbank became a business and investment broker, persuading companies including Sony, NEC, Cisco, Fujitsu and Toshiba to co-operate and invest in a venture headed by the Softbank-owned arm of U.S. systems integrator Businessland.
In other sectors, Son probably moved too early, though they are business areas that 20 years later are now booming. Between 1991 and 1995 he tried to build an online shopping business, called Systembank. And in 1994 he persuaded NTT to invest in a start-up video-on-demand operation. Both were stymied by poor bandwidth and consumer conservatism.
Softbank's first investment in Yahoo came in 1995 when Yahoo was a directory service and had not evolved into a portal.
The following year Softbank was a founder investor in pay-TV player Japan Sky Broadcasting, alongside Rupert Murdoch and News Corp.
By 1999, at the height of the Internet bubble, and after amassing stakes in ZD Net, Yahoo Japan and some 100 other tech ventures in Japan and the U.S., Softbank had a market capitalization of $190 billion. The company lost 90% of its value in the subsequent rout.
After the collapse Son steered the company more towards Internet provision, services and telecoms.
Softbank made its first investment in Alibaba, for just $20 million, in 2000. Its 32% stake is now worth $71 billion.
There may be a China angle to a Softbank takeover of DWA too. That huge position in Alibaba could give great access to market for the nascent Oriental DreamWorks in Shanghai, which is venturing into live action features, TV series, short-form animation and Internet content -- as well as theme parks and animated feature production.
© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC
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