Some recent Sony media moves

[slider]

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).

Hold on a second, I had an S700i - never realised it had such a refined playback capability. (The S700 I'm talking about was a phone though... hope I'm not getting confused here...?)

 

[cthellis42]

You can re-download music from iTunes, just not automatically. I know a number of people who've managed to go through Apple support lines and get media that came through damaged (but "downloaded successfully"), or got them to reactivate their media following a complete hard drive failure.

Certainly they are not OBLIGED to, and have the legal wording to go "poo poo on you!" if they want to, but with a modicum of politeness and some patience, they're usually willing to oblige.

That being said, iTunes really needs a once per year "re-download your media" option in the same manner than you can occasionally reset all your "permitted computers." At the VERY least. That way you have SOME ability to recover your purchased media, but they don't have to worry about people soaking their bandwidth willy-nilly.

 

[Titanio]

This article suggests that they're not quite abandoning Connect - but they are refocussing on Playstation.

(AP) -- Internet music retailer Sony Connect Inc. is eliminating some positions as part of a restructuring plan to shift resources to other online services, but it intends to continue operating, the company said Tuesday.

The company denied a report that suggested the job cuts are a prelude to shutting down its music service in a matter of weeks.

Sony Connect is shifting emphasis to other network services, specifically one for users of the PlayStation game console, the company said.

 

[patsu]

The music files and the infrastructure are still good to go. The customer support (if any left) may have to be retrained. There were pretty bad comments about their attitude in this forum.

A few posts up, there are talks about renaming and relaunching Grouper next month. If so, they may rename Sony Connect too.

 

[DemoCoder]

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.

This frankly sounds ridiculous. So you're claiming a "lean" online store requires $100 million per year in operating costs to run (99 cent songs)? What do they do, hire union workers who individually go to a warehouse, pick up a USB stick with the AAC file, and ferry it to the Web server when you click "buy"? Amazon's operating expenses are about $700 million, and this is for a heterogenious online store with physical warehouses, delivery, huge customer support, auctions, substores, web site hosting, etc

A music store is a glorified download service. The only difference between a pirate site hosting forums, ratings, mp3s, etc is and iTunes is the checkout operation, and customer support.

A "lean" music store should be able to run on a shoestring budget. The bandwidth consumed by 100M song tracks downloaded is trivial, it wouldn't even cost 1 cent to download a file on existing co-los. Once the software for the store was developed, scaling is simpler a matter of scaling the hosting, and scaling customer support.

I guarantee you with 3 months of development time, and <20 PHP/Ruby-on-Rails developers, plus a garden variety hosting service, I could duplicate iTunes's service AND be able to scale to 100m downloads per year, and not spend more than $5 million. And frankly, I'd outsource customer support to India or the Czech Republic, and I bet total expenses per year would not exceed $20million, counting marketing.

The only reason big company stores are so expensive is because corporations are top heavy with loads of employees, managers, and support staff. They invariably end up with too much labor, and the middle management incentive is not to decrease labor. A Sony or Apple store will cost 10x to run than a place like ZipZoomFly or allmp3 because of the corporate inertia of those relatively old companies.

But these costs to run these stores are by no means "fundamental" costs. That's why tones of Web 2.0 startup companies handle millions and millions of user transactions with a handful of employees and hardly any startup funds. It's not rocket science.

 

[cthellis42]

Uh... you seem to think they keep all the revenue from the music sales, themselves? I'm not sure what the exact numbers are, but supposedly at least 2/3rd of the song sale immediately goes back to the publisher. That's just the normal per-track licensing, too, and doesn't count any special deals you work out, all the free stuff you offer to entice people TO your service (certainly I'm a net loss for Apple ). Even something in the line of $30 million sounds high, but I'm pretty sure we have no idea what all the costs involved are.

Sony's different in that they don't have to lose as much per track, since they ARE the publisher for many songs. Heck, they can lean on their own content more heavily if they want, or even alone (only reason there are still UMD's floating about), until they have a handle on things. Lets them tinker without worrying about flak from other publishers.

Now if only the DO put some effort into it, because Connect has been pretty shruggable thus far, and last time I tried SonicStage (in the v3's somewhere) it blew massive chunks. Honestly, I don't know how Napster is still around either, as their connection/download software made me absolutely cringe to use.

 

[DemoCoder]

Regardless of how you slice it, an online store which offers nothing more than a catalog of all digital products to download does not inherently have a high cost overhead. Stores which deliver physical products? Yes. They have to have a supply chain, warehouses, people to work those warehouses, huge customer supply for inevitable misdeliveries and returns and shipping issues, etc. Still, even online e-tailers have less costs than brick-and-mortar retailers.

Apple will ultimately make higher margins selling content than selling iPods, even if that means laying off 90% of the workforce that developed iTunes and iTMS, and offshoring maintainence of the code base.

Apple has no inherent long term advantage manufacturing commodity music playback devices, that's a razor-thin margin game they will ultimately loose. What they would have to their benefit is a large entrenched margin, a built in path dependency, ecosystem, and community of people. And it is there where they will eventually make money once their iPod business saturates.

Which is exactly why we are seeing the iPhone, because Apple can't maintain iPod sales growth at its current rate, otherwise, all six billion people on the planet would have to own one, meanwhile, they will be eroded by cheap knockoff devices. Thus, they are trying to change the game, but eventually, iPhone-like devices will be commodified, and they'll have to try something else. On and on it goes. The one constant is software and services: OSX, iTMS, etc. It's harder to commodify OSes and online community services, which is why MS, Google, eBay, etc has been so successful.

 

[cthellis42]

Just the fact that you're saying eventually mean you're basically lending credence to the idea that, while a service is being established, and trying to build and grow, their costs are quite large indeed.

If the iTMS barely pulls in profits--certainly no good reflection to the billions of songs they've already sold--just what is that going to say about any service actively trying to compete with them for mindshare?

Certainly a service doesn't HAVE to, but then they're basically establishing a limit on how much market penetration they're likely to get.

Obviously the iTunes store runs hotter and heavier than the others, because it's determined to stay ahead, and they're pulling their profits from other revenue streams, but it forces competitors to keep up as much as they can, while they are NOT pulling in other sources of profit.

 

[DemoCoder]

Just the fact that you're saying eventually mean you're basically lending credence to the idea that, while a service is being established, and trying to build and grow, their costs are quite large indeed.

Software has a fixed development cost, and marginal maintainance cost if done correctly. For small companies, the reverse is true. Costs in the beginning end up being low, and once the company makes it big, costs tend to skyrocket as the company goes on a hiring binge, seeks acquisitions, etc. This usually happens when some MBA is installed by investors in place of the founders, who tries to use traditional techniques to grow the company.

I'm telling you that doing a download service is trivial and that even $10 million is too high a cost. Today, such services are built in garages on shoestring budgets, or in startup incubators like Y-Combinator. VCs don't even get involved unless they've already got revenue and a huge userbase these days, so the era of someone dropping $40 million on a startup for a whiteboard idea is over.

You've got Russian outfits already duplicating iTMS download services for virtually nothing, and they don't even have deals with the music industry to get the content, they've got to rip it from CDs into MP3s which is laborious.

As I said, if Apple's costs for iTMS arre high, it's because of corporate bloat and has zero to do with the difficulty of running an online store for digital downloads.

 

[slider]

http://www.gamesindustry.biz/content_page.php?aid=26534

Relevant or not? You decide.

EDIT: Consider me chastised.

The gamesindustry link isn't that useful (so, yeah I get why Stefan was p*****!) but the original Newsweek article, I think, is the first semi-official statement we've had about Sony's download plans. I may be wrong on that though.

Interesting at least to me for these reasons:
a) to see what plans they do reveal at E3
b) which media companies they're partnering with (will it mirror Blu ray? no reason it should...)
c) spooky how close a path MS & Sony are treading! C'mon MS, release a version of Home...

And no, posting this didn't kill me!

 

[StefanS]

http://www.gamesindustry.biz/content_page.php?aid=26534

Relevant or not? You decide.

Would it really kill you, to add one simple sentence to explain what the link is about and another one to add some opinion to it?

I case somebody else is wondering: It's about the new PS3 80 GB and Sony's plan to offer downloadable movies for the PS3.

 

[slider]

Sorry in a rush. On my way to work. I'll edit later if I can.

 

[bomlat]

sorry,it not connected to the topic strictly,but the apple in't allow the user to download the songes as many times as he want to the enabled devices?It is crazy.
I like the download services,because example my steam acc is easly trensferable,and I can warm it up on every computer with steam client.this is the major virtue of the download services.

 

[slider]

I didn't see this posted:

http://www.gamesindustry.biz/content_page.php?aid=27106

Sky + Sony to introduce VOD for the PSP. Things seem to be moving on slowly. Although I can't wait for the day when we'll see a unified (across all sorts of hardware) download service. More details on this to follow at Leipzig.