Sony is bleeding money - business strategy discussion

[temesgen]

... because you didn't check gadget site frequently enough.
And Sony's PR people are not doing enough to spread their own goodness.

Sony said they want to take their time to make something they are happy with, instead of rushing out a me-too. Remember they are generally not keen to compete with price.

I have an iPad. Am deciding whether to get S2 or NGP.

Guilty as charged. So what do these tech sites say about the price of the NGP? Just saw a thread getting started on PS4 development. Seriously any thoughts on my other questions?

 

[patsu]

I have no idea. Besides the PS4 thread, GAF also started a NGP rumor thread here:
http://www.neogaf.com/forum/showthread.php?t=431494

 

[Shifty Geezer]

Going back 20 years ago this same group of consumes when they bought a TV for the most part wanted a Sony Trinitron TV period, that tech was viewed by many consumers as hands down the best you could buy.

Because it was! Trinitron was ubiquitous and found its way into every TV studio for monitors. Sony's heritage was pioneering tech and providing best quality, which warranted the premium brand price. Seems that now rivals have caught up and match with similar quality by are priced more cheaply, squeezing Sony's financial model, just as you say.

The area to compete now is services. Which Sony should have had up and running 5+ years ago. The had the best resources of any global company to establish themselves as the dominant digital content provider, with movie, TV, music, and game production. But they've arsed about and allowed themselves to be overtaken by the likes of Apple. If they remain just a CE device company, they can't really carry on as they are. They need that future service to become established. Or, failing that, some fantastic new technologies like Sony of old. Things like electronic paper and OLEDs have been Sony spearheads. I don't know that they can have anything new and exciting to rise to dominance like Trinitron though. There's way too many companies investing way too much RnD for anyone to likely get a massive leadership technology ever again.

 

[temesgen]

Because it was! Trinitron was ubiquitous and found its way into every TV studio for monitors. Sony's heritage was pioneering tech and providing best quality, which warranted the premium brand price. Seems that now rivals have caught up and match with similar quality by are priced more cheaply, squeezing Sony's financial model, just as you say.

The area to compete now is services. Which Sony should have had up and running 5+ years ago. The had the best resources of any global company to establish themselves as the dominant digital content provider, with movie, TV, music, and game production. But they've arsed about and allowed themselves to be overtaken by the likes of Apple. If they remain just a CE device company, they can't really carry on as they are. They need that future service to become established. Or, failing that, some fantastic new technologies like Sony of old. Things like electronic paper and OLEDs have been Sony spearheads. I don't know that they can have anything new and exciting to rise to dominance like Trinitron though. There's way too many companies investing way too much RnD for anyone to likely get a massive leadership technology ever again.

Does Sony have the right leadership in place to transition to a services business? Are the delays due to the inertia of a large organization or have they assembled the wrong team at the top?

Also WRT to this (see bold) I think smart corporations with the cash are buying the patents of smaller companies that invent the new tech and then bringing the tech to market in their products exclusively or charging royalties and bringing lawsuits to those who circumvent.

 

[Shifty Geezer]

Does Sony have the right leadership in place to transition to a services business? Are the delays due to the inertia of a large organization or have they assembled the wrong team at the top?

they didn't before Stringer. Sony was an umbrella brand of a load of independent companies who didn't work together as a unified force. Stringer has been aiming to change that and to get Sony's different divisions cooperating towards common goals. The folly of this is how Sony were buying and building all these divisions to get to that position of being the number one entertainment provider (hardware and software), and then failing to pull all those pieces together. Like spending lots of money on individual jigsaw pieces but never bothering to assemble the final picture.

 

[mrcorbo]

they didn't before Stringer. Sony was an umbrella brand of a load of independent companies who didn't work together as a unified force. Stringer has been aiming to change that and to get Sony's different divisions cooperating towards common goals. The folly of this is how Sony were buying and building all these divisions to get to that position of being the number one entertainment provider (hardware and software), and then failing to pull all those pieces together. Like spending lots of money on individual jigsaw pieces but never bothering to assemble the final picture.

They are also running into the problem that, in order to maintain maximum profitability, their content businesses need to reach the widest distribution possible. This means reaching deals with as many distributors as possible with as favorable terms as possible. Conversely, their distribution businesses need to acquire as much content as possible at as low of a cost as possible. This means reaching deals with as many content providers as possible with as favorable terms as possible. As a result, acting in the best interests of one means acting against the interests of the other to some degree.

Further, giving preferential treatment to your own businesses would risk alienating other partners causing them to be less likely to give you the most favorable terms as they would be aiding a competitor. This would prevent Sony from achieving the maximum possible benefit from their ownership of the entire distribution channel, though having guaranteed content to distribute and guaranteed distribution for their content is still a decent advantage to have.

 

[temesgen]

they didn't before Stringer. Sony was an umbrella brand of a load of independent companies who didn't work together as a unified force. Stringer has been aiming to change that and to get Sony's different divisions cooperating towards common goals. The folly of this is how Sony were buying and building all these divisions to get to that position of being the number one entertainment provider (hardware and software), and then failing to pull all those pieces together. Like spending lots of money on individual jigsaw pieces but never bothering to assemble the final picture.

Perhaps I should have been more clear. I'm not convinced that Stringer is the right guy, he's had almost 6 years to implement change and it isn't coming quickly enough. For example how does MS get streaming movies quicker, how does Netflix do a deal with MS before they do one with Sony when the in all practical terms a deal with Sony could have been an extension of the deal Sony had to agree to when they agreed to allow Netflix to stream movies in the first place.

It seems to me that they need a 'tech' guy at the top who truly understands how to integrate systems. Stringer comes across as someone who is more familiar with managing content and media which is important but not core to getting Sony on track.

 

[eastmen]

Perhaps I should have been more clear. I'm not convinced that Stringer is the right guy, he's had almost 6 years to implement change and it isn't coming quickly enough. For example how does MS get streaming movies quicker, how does Netflix do a deal with MS before they do one with Sony when the in all practical terms a deal with Sony could have been an extension of the deal Sony had to agree to when they agreed to allow Netflix to stream movies in the first place.

It seems to me that they need a 'tech' guy at the top who truly understands how to integrate systems. Stringer comes across as someone who is more familiar with managing content and media which is important but not core to getting Sony on track.

Look at what your talking about . Streaming movies , Netflix , ESPN and online are all SOFTWARE .

Sony's talents have never been with software.


how many pieces of software ( and i'm not talking games) from Sony have you stoped and said holy cow thats amazing !


Sony hasn't been able to compete on the software level (not talking about games) with MS and I doubt they ever will.

 

[patsu]

Games are software. The Blu-ray stack is software. Sony developers proved innovative and reliable there.

If they want to, they can build up software and service expertise (There are already pockets in the existing Sony). Or rather they will have to go there to compete with the likes of Apple and Google. But it _will_ take time. Creating world class software is not easy by any measure. Even Microsoft have trouble with Windows for so many years.

 

[Shifty Geezer]

Look at what your talking about . Streaming movies , Netflix , ESPN and online are all SOFTWARE.

No, they're services. Sony have no trouble with implementing streaming media. They just haven't got a unified interface, or decent networking with other service providers. On the plus side, they have various free-to-view internet channels directly supported in XMB. These are just web services though. Their own content platform, Qriocity, has just taken way to long to finalise. But they are dealing with this in a more thorough way than MS. MS are just selling content. Qriocity is aiming to be a platform agnostic service, and given how awkward these media companies can be, I can understand it taking an age to get them all together. What Sony should have done though was, prior to iTunes success, made their own content platform with all their content and marketed it up the wazoo until everyone else wanted to join, like iTunes. It's kinda ludicrous that Apple, with no media content of its own, could trump Sony in establishing a de facto sales point for so many people. Qriocity's catchup is thorough and may work out, but Sony should have been developing it from in front instead of from behind.

 

[RudeCurve]

MS does have something like Qriocity...it's called Zune Pass. Having cloud storage is easy and can be implemented quickly since MS already have 95% of pieces in place.

http://tromboneforhire.com/2011/03/29/nice-work-amazon-and-now-our-eyes-are-on-zune/

 

[-tkf-]

IMO Sony have lost a lot of the "cool factor" in many of their products. Many of them just don't stand out from the crowd. I think a lof of it has to do with the competitiion catching up and some even surpassing them.

Sony still has Cool factor that goes beyond it´s biggest competitors, the gap when it comes to the best products is narrow on many fronts and on some they are behind.

And it hardly shouldn´t come as a surprise, in a world where the competition is fierce and copying designs and ideas is the way to go it´s very hard to be in the lead all the time.

On some accounts i think Sony has done well to actually keep it´s position on so many market with the extreme pressure they are subjected to all the time.

 

[Shifty Geezer]

MS does have something like Qriocity...it's called Zune Pass. Having cloud storage is easy and can be implemented quickly since MS already have 95% of pieces in place.

http://tromboneforhire.com/2011/03/29/nice-work-amazon-and-now-our-eyes-are-on-zune/

It's not about cloud storage. It's about having a system of browsing and purchasing/renting content and sharing it across devices. I never said no-one else couldn't do it either - only Sony were in the position to offer this at/before PS3 launch if they had had the sense to get behind the initiative, instead of 5 years later when everyone's giving it a go.

 

[RudeCurve]

5 years ago the only company to do this was Apple and Netflix, are you saying that SONY would've been competitive with them? I find that highly unlikely.

 

[Shifty Geezer]

They could have. They had everything in place to pull it off, except the vision and ability to execute. What makes you think Sony, with its music and film libraries, existing network services, PS brand, portable device with best-available viewing screen for the time, and new HD console coming out, could not ever compete with Apple and Netflix, let alone wasn't in a stronger position than either of them?

 

[-tkf-]

They could have. They had everything in place to pull it off, except the vision and ability to execute. What makes you think Sony, with its music and film libraries, existing network services, PS brand, portable device with best-available viewing screen for the time, and new HD console coming out, could not ever compete with Apple and Netflix, let alone wasn't in a stronger position than either of them?

100% correct. Sony owned the content and produced and could have produced the devices to play the content. They stumbled so hard on this that the only comparison is Napster and the Music industry

 

[Nesh]

5 years ago the only company to do this was Apple and Netflix, are you saying that SONY would've been competitive with them? I find that highly unlikely.

Why would that be unlikely?
They had the Walkman before Apple came with the iPod, they developed the devices that played movies and videos, and they had the content. They had the right foundations laid in front of their eyes

 

[Arwin]

Look at what your talking about . Streaming movies , Netflix , ESPN and online are all SOFTWARE .

Sony's talents have never been with software.

how many pieces of software ( and i'm not talking games) from Sony have you stoped and said holy cow thats amazing !

Sony hasn't been able to compete on the software level (not talking about games) with MS and I doubt they ever will.

I agree. I think people are confused because Sony has been a great publisher in the past. But they have never been
good at integrating their hardware products with great software. The NGP may be a significant step forward for them in this regard, but even there it looks like they won't have their full vision realised at launch.

 

[Shifty Geezer]

I agree. I think people are confused because Sony has been a great publisher in the past. But they have never been good at integrating their hardware products with great software..

It would have been far easier for Sony to buy in the necessary expertise to create a unified network platform than for all the other companies to buy and secure content creators/publishing deals. There's also aspects of Sony software that has been good (because each software product comes from a separate division with its own software expertise and vision, so it can all vary greatly). Sony Vegas is one example. XMB is pretty good too, especially when it launched. Some of Sony's dev tools are also excellent. So 'Sony's software is no good' is too generalised a statement and not a realistic excuse for their failing. A proper upper-management decision, a well defined vision, and a few job postings, and Sony would be on top of the electronic entertainment market now and be on the rise.

The past 20-30 years, Sony've been building themselves up to this point, only to fumble on the last stretch.

 

[RudeCurve]

Why would that be unlikely?
They had the Walkman before Apple came with the iPod, they developed the devices that played movies and videos, and they had the content. They had the right foundations laid in front of their eyes

It's unlikely because Netflix had the video market cornered and they still do. Even Apple is having a hard time penetrating that market with Apple TV today. As for music what makes you think they'd be successful? There were plenty of online music services back then and look where they are now? Do people still use Napster? Back then SONY was still pushing proprietary ATRAC format which nobody wanted to touch.

You people act like Qriocity will be a smashing success...lets wait and see.