Sony plans Web-based TV service that would rival cable, satellite providers

Bloomberg NewsJanuary 7, 2014 

CES 2014

Kazuo "Kaz" Hirai, president and chief executive officer of Sony Corp., delivers a keynote speech during a news conference at the 2014 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Tuesday, Jan. 7, 2014. Since taking over as chief executive officer in April 2012, Hirai has trumpeted what he calls a One Sony vision -- that he can deliver better returns making televisions, mobile phones and consoles under the same roof as movies and TV shows, video games and music.

PATRICK T. FALLON — Bloomberg

Sony will begin testing an Internet-based television service in the U.S. this year, challenging traditional cable and satellite providers.

The product will combine live programs with an on-demand library of films and TV shows, Andrew House, chief executive officer of Sony Computer Entertainment, said Tuesday at the International Consumer Electronics Show in Las Vegas. The Tokyo-based company will also test a video-game streaming service for PlayStation consoles, smartphones and TVs.

The cloud-based efforts highlight Chief Executive Officer Kazuo Hirai’s bid to remake Sony for a new generation of consumers who want easy access to content anytime, anywhere. Sony’s products must embody the Japanese spirit of “kando” – to inspire or capture users emotionally, Hirai said Tuesday at CES.

“We don’t consider any product a success unless we have delivered that ‘Wow,’ ” Hirai said. “The mission of Sony is to inspire and fulfill people’s curiosity around the world.”

Sony didn’t offer details of any content agreements for the TV service.

The game service, called PlayStation Now, will offer a subscription option and titles to rent, House said Tuesday. The company will demonstrate it this week at CES on its Bravia TV sets and the PS Vita hand-held device, and begin testing in the U.S. at the end of this month. Full introduction is expected midyear, House said.

Since taking over as chief executive officer in April 2012, Hirai has trumpeted what he calls a One Sony vision – that he can deliver better returns making televisions, mobile phones and consoles under the same roof as movies and TV shows, video games and music.

To make One Sony a reality, Hirai has increased collaboration at the company’s disparate units. In 2012, he sent camera engineers to the company’s phone division to give the Xperia Z handset advanced photography capabilities.

On Tuesday, he outlined how Sony can use its unique assets to create products that will inspire young people who have grown up in a digital age.

“It’s time to move beyond the just-good-enough era,” Hirai said. “No more commodity products. We must and can do better.”

Hirai stumbled in October when Sony reported a $180 million quarterly loss at Sony Pictures Entertainment, giving credence to calls made last year by billionaire hedge-fund investor Daniel Loeb, who urged the company to sell as much as 20 percent of the film and TV production and music businesses in an initial public offering.

Since then, Sony has scored a hit with the PlayStation 4, introduced starting on Nov. 15, which has taken the lead over Microsoft Corp.’s Xbox One.

Sony sold 4.2 million PlayStation One units through Dec. 28, House said Tuesday, exceeding analysts’ estimates.

“It’s surprising,” said Michael Pachter, an analyst with Wedbush Securities in Los Angeles. “I did not think they could make that many. It shows a lot of confidence by management that this device is going to do really well.”

Microsoft, based in Redmond, Wash., said Monday that consumers bought more than 3 million Xbox One players in 2013.

Sony sees Web-delivered content from its TV, movie and music units as crucial to turning around the struggling television manufacturing unit, which hasn’t made a profit in nine years and ranks fourth globally in revenue, according to Statista, a research service.

Obtaining rights to films and TV shows owned by others may be difficult and expensive, said Craig Moffett, senior research analyst at MoffettNathanson LLC in New York.

“The digital rights issues are incredibly complicated,” Moffett said via email. “Sony might therefore be required to get the rights not only for the networks, but also for the individual shows. And in many cases, those rights simply aren’t available. They have already been sold to companies like Netflix.”

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service