Some recent Sony media moves

[patsu]

* http://www.paidcontent.org/entry/41...-video-services-focus-on-servicing-playstati/
Tim Schaaff is the VP they hired from Apple.

* http://www.paidcontent.org/entry/41...aunch-en-route-sony-myspace-minisode-network/
The MySpace concept and Grouper community content have been mentioned in various PS3 and Home presentation before.

 

[Titanio]

I guess this ties in with the occasionally mentioned media and on-demand services they're supposed to be rolling out this year on PS3.

I wonder, though, what it means for their exposure in the PC space. And for their mp3 players? Are they basically giving up to iTunes, or will we see a version of the Playstation Store accessible generally, without the PS3, serving non-game content?

 

[patsu]

Frankly I have no idea what they are up to, but unifying their music front would be a good start.

I expect them to offer a music download section on PSN since all those music has been digitized by Connect anyway. As long as they can distribute new and old music at a profit per piece, they should be able to explore further. They have captured audience in PSP and PS3. Sadly PS2 is being left out.

As for video, Harrison mentioned Grouper during the Home presentation. Home will go open beta next month. Coincidentally, WSJ said Grouper will relaunch next month with new look, new name, ... so I hope something is cooking there. Today we know these Grouper content can be accessed from Bravia Internet Video Link module. So again the "same" content can serve multiple devices. Then there's the P2P media sharing service @ Home too. Perhaps we can also route content to Grouper while we are at it ?

Finally, Sony hinted at video downloading by Fall this year. So there may be more to come from corporate Sony (a la HanaTV in Korea).

For now, I hope they improve DLNA just a wee bit more. It's very close now. And endorse one or two DLNA servers for ease of setup.

 

[Sis]

Are they basically giving up to iTunes, or will we see a version of the Playstation Store accessible generally, without the PS3, serving non-game content?

If they are, it doesn't sound like a terribly good move; the iTunes service itself is either break-even or makes pennies per user, depending on who you ask. But neither situation implies one in which you'd base a business around. Apple has proven that the business value is in the hardware, not the software.

 

[patsu]

Sis... I don't fully trust Steve Jobs in his comments on iTunes. I know Stanford business professors mentioned that beyond N years (where N=5), iTunes is more important than iPod assuming iTunes can penetrate deep worldwide. There are associated values/things to sell with a trusted worldwide digital distribution infrastructure.

Don't ask me for the paper. I don't have a copy. I believe Apple now lumps their iTunes+iPod numbers together in their financial report. They used to itemize some of them, but I have not verified this myself.

 

[ManuVlad3.0]

With PS3, PSP, Sony Ericsson mobile phones and a PS Store version for PC maybe Sony could compete with iTunes/iPod.

 

[patsu]

Will take some time. Apple has a simple, efficient and unified platform that extends worldwide. Sony is just starting to consolidate its businesses and infrastructures, and its execs have corporate minefields to navigate.

 

[archie4oz]

Don't ask me for the paper. I don't have a copy. I believe Apple now lumps their iTunes+iPod numbers together in their financial report. They used to itemize some of them, but I have not verified this myself.

Well on average, an online music store typically needs to sell about 100 million tracks a year to break even on operational costs, and thats for a fairly lean operation. From what I've heard, iTunes runs on the rather expensive side operationally speaking. Of course Apple's sold over 2 billion songs. But there's other expenses (trailers, podcast feed aggregation, and of course exclusive deals). Judging from estimates of profit margins on iPods, I'd venture that iPods bring in mountains of more revenue than the store does. That's a significant reason why Sony got involved in starting Connect (and honestly the only other genuinely serious potential competitor at the time). Still, I'd say that iTunes is reasonably profitable.

Sis... I don't fully trust Steve Jobs in his comments on iTunes. I know Stanford business professors mentioned that beyond N years (where N=5), iTunes is more important than iPod assuming iTunes can penetrate deep worldwide. There are associated values/things to sell with a trusted worldwide digital distribution infrastructure.

Adding value. That's what it essentially is. Building the infrastructure isn't terribly difficult, there's little intrinsic value in itself. It's the value it adds to the products that use it, thus making those said products a better sell. But it's a double edged sword. Yes it can bring value, but if it doesn't profit, then it's just an added expense to the device.

 

[patsu]

I agree. But most of these analysis are based on Apple's current model. How will things change if:

* Apple allows licensed access to iTunes brand, library, infrastructure and userbase... essentially becoming a pure platform play. In past years, they did not issue any licenses perhaps to complete their iPhone development. In the next few years, it is not clear which would make more money: Selling proprietary hit products (with inherent risks) or certifying + selling platform licenses. Naturally, they are not mutually exclusive.

* Apple shares infrastructure cost with a large Internet company like Google. Someone mentioned in passing that a large part of Amazon's cost is in operation and contingency infrastructure. That's why they launched initiatives such as ECS, S3, ... to compensate for them.

I am not advocating any model... but having some estimated numbers would be rather telling.

EDIT: This is all discussed within Apple's context. Sony or Microsoft will have different ways to get to similar goals.

 

[cthellis42]

If they are, it doesn't sound like a terribly good move; the iTunes service itself is either break-even or makes pennies per user, depending on who you ask. But neither situation implies one in which you'd base a business around. Apple has proven that the business value is in the hardware, not the software.

Apple doesn't own a big chuck of the music business, which is who they're giving the lion's share of music sales TO. More ways to point you in their direction and sell their content is a good thing for them, even if it doesn't sell hardware. Meanwhile, if they could FINALLY deliver something useful in the media-management end, or the extra things you could do WITH your music... It could actually help sell more of their players, too, (not to mention the PSP), as some of them are pretty nifty; they're just subsumed in the iPod War, and have nothing to brace themselves up.

 

[Shifty Geezer]

I wonder, though, what it means for their exposure in the PC space. And for their mp3 players? Are they basically giving up to iTunes, or will we see a version of the Playstation Store accessible generally, without the PS3, serving non-game content?

My guess is a unified content network that sells content, direct to PS devices, and also to non-PS devices. If you want to offer everything you have to PS customers and have a shop for them, it'd be a waste to have a duplicate shop for PC content. A single platform lets you concentrate all you efforts on making that the best possible instead of dividing efforts among multiple services. So I think they've been working on a single platform, and it'll roll out in a couple of months as Connect dies. It'd be stupid to pull the music service before there's a replacement, and lose those sales plus most importantly lose the customers to other services.

 

[onanie]

My guess is a unified content network that sells content, direct to PS devices, and also to non-PS devices. If you want to offer everything you have to PS customers and have a shop for them, it'd be a waste to have a duplicate shop for PC content. A single platform lets you concentrate all you efforts on making that the best possible instead of dividing efforts among multiple services. So I think they've been working on a single platform, and it'll roll out in a couple of months as Connect dies. It'd be stupid to pull the music service before there's a replacement, and lose those sales plus most importantly lose the customers to other services.

Indeed, each company is looking at what it has already, and synergising the strengths of its assets into a greater product. In Sony's case, it would be insane not to be offering their itune-like services, along with their considerable music and video assets, to the playstation audience. Both the service, and the playstation business, will benefit greatly from each other for obvious reasons.

Being primarily a web interface, they could easily cater to the PC space still.

 

[wco81]

The thing is, people don't fill up their iPods with iTunes content.

Yet recently, Apple claimed 300 million Windows downloads or users of iTunes. I guess if it was 300 million active users, that would be a big deal.

So maybe a lot of people get iPods because iTunes is available but they don't actually end up buying a lot of content.

Of course, now Apple is saying you have to have an iTunes store account to use the iPhone. Not just download and use iTunes but actually open an account with billing info.

That database is worth a lot.

Now will a content download service make people more likely to buy a PS3 or other Sony products over the competition? At this point, it's hard to see that. They would have to introduce a business model which destroys current models. Like maybe video rentals for a couple of dollars which last for a week or two, which kills off Blockbuster and also decimates Netflix.

I don't think the studios are going to cut their prices or help enable a rental model which would hurt DVD sales.

So whatever service Sony comes up with is likely to be another me-too offering at best.

 

[Titanio]

One thing about iTunes - I know a number of people who use it just to organise their music rather than actually buy anything from the store. So I'm sure there's many many people in a similar boat, and perhaps that's where the vast iTunes userbase comes from.

 

[ManuVlad3.0]

Would be a good idea a PC interface like iTunes with built-in emulator that allows users to download old PS games too (besides music, movie, tv shows)?

 

[Shifty Geezer]

I think that's what they're gunning for. Perhaps the client filters available content suited for the machine? Or maybe you can download any old thing and sort it out after you've got it? Either way I expect one portal for everything Sony sells online - music, movies, games. Indeed this has been my expectation for a couple of years now, as it's the most sensible solution and ties in with Sony comments on the matter.

 

[ManuVlad3.0]

I expect this too. Phil Harrison said something about Home running on cell phones and smart phones in the future. IIRC, Bravia TVs already has XMB interface. Would be great if you could access PS Store directly from the TV to streaming content.

 

[slider]

Not exactly directly relevant but...

I recently bought one of the new Sony music players (AW805 I think?).

(BTW, it's an excellent little machine: handles music, vids & photo & for once the softward is NOT buggy at all - in fact it's very efficient and slick!)

When you connect it to the PC the Walkman launcher fires up which has a big button marked "Download". It takes me to this...

http://www.sony.co.uk/view/ShowArticle.action?article=1172517871814&site=odw_en_GB (which isn't what we're waiting for!)

I can't wait to see what a unified service will look like and how the integration to the PS line will work. The only everyday activity that I do that I don't use my PS3 for is browsing the web. On an SDTV it looks like... well y'know what it looks like.

 

[archie4oz]

Ah yeah the Dober device... Not it's not bad, but it's EU/Canada only... Also it lacks the bitchin' integrated noise cancelling of the Beta series devices (S700 models).

 

[ban25]

I actually like Connect, and will be disappointed to see it go. Unlike iTunes, Connect lets you re-download songs you've already purchased -- and you can burn CDs on Vista x64.