Sony's content platform and business strategy *spawn
- Thread starter boommoob1
- Start date
For the same reason Apple want iTunes. It's potentially extremely lucrative, hence why lots of companies have rolled out their own competitive products. It's a great idea from Sony, just too little too late to probably get anywhere. SNE should have launched intact and worldwide on PS3 and PSP and PC in 2006, and be integrated into Sony TVs and mobile devices as these become more capable.
At the basic level, it's just more choices for consumers. The video services offer different selection, and different billing schemes. e.g., I subscribe to Hulu Plus but not NetFlix. I also rent occasional movies and TV episodes from PS Video Store and Vudu because NetFlix and Hulu Plus may not have them yet.
At the Playstation Suite level, you are correct to say that Sony should differentiate their offerings more distinctly from NetFlix, iTunes, etc. Right now, besides pricing and content selection, it's also about channel development. e.g., NetFlix is not available in EU yet, but Sony has streamed 18 million streams there.
All the service providers will continue to improve, and afterall Sony has a large content arm. It's natural for them to want to control their channels. I do hope they combine their music games and music content into a unified service though (Same for movie games + movies). It seems more interesting that way.
Most importantly, at the industry level, Sony and many companies belong to the UltraViolet DRM camp. Apple and Disney belong to the KeyChest DRM camp. They are trying to expand their respective DRM footprint. Both DRM schemes allow consumers to buy one movie and share or upsell it across devices. It may be the next big thing in media consumption.
Finally, remember how the first wave of GoogleTV failed ? Looking forward, if Sony has Video and Music Unlimited, plus the existing PS3 video partner services (Hulu Plus, Vudu, MLB, NFL, and many others in EU, etc.), perhaps they can set up value added services similar to GoogleTV too. Sony can also use free trial services to sell their devices.
EDIT:
Just noticed NetFlix is changing as we speak:
http://venturebeat.com/2011/09/01/netflix-loses-starz-2012/
http://venturebeat.com/2011/09/01/netflix-price-hike/
I forgot to mention that video services is one of the most used apps on PS3 and 360. It is in Sony's interest to develop this area better. They also invested heavily in 3D programming. I wouldn't be surprised if 3Net and ESPN 3D make their way to PS3 somehow.
Sadly only an 8 bit digital company with loads of aliasing.
(digital isn't always better...)I have always thought they are spread too thin across too many devices.
Once they narrow down their device platforms, they should be able to focus better. At the moment, Vita actually looks more interesting than the 2 tablets. However, I think Vita can be even more impressive than iPad for gaming, if Sony put more effort into the user benefits and experiences (instead of just listing individual apps and games).
Plus, Playstation Suite should be done as if the future of Sony depends on it. ^_^
It could be one of the most pervasive clients of Sony Entertainment Network.
Hirai needs a hit hardware product everything else is a sideshow. After the reveal of the tablets i think the Hirai/Stringer axis rests on Vita to prove that they should of been allowed anywhere near the leadership of Sony.
Hirai's focus is on the network platform. His previous focus was to reduce PS3 cost.
Vita and the Playstation brand may now be under Andrew House's charge.
Stringer seems to be more interested in contents business since that's his background.
The Tablets and the eReader are managed by someone else in the group. Don't know who, but I agree they are not very interesting for gadget people so far.
We shall see how the team turn out.
In any case, coming here to post...
Netflix Introduces Another Restriction:
http://www.blu-ray.com/news/?id=7278
Vita and the Playstation brand may now be under Andrew House's charge.
Stringer seems to be more interested in contents business since that's his background.
The Tablets and the eReader are managed by someone else in the group. Don't know who, but I agree they are not very interesting for gadget people so far.
We shall see how the team turn out.
In any case, coming here to post...
Netflix Introduces Another Restriction:
http://www.blu-ray.com/news/?id=7278
Electronics still makes up 75% of Sony. You dont have the necessary expertise running that and no amount of pssuite, movie store, movie studios will stop Sony from collapsing. Sony have been leaderless for atleast 8 years.
Where does the 75% come from ?
The electronics landscape has changed. It is no longer about selling hardware. Consumers want to buy an experience, and they look at the ecosystem. That means contents (movies, music, games, books, apps), customer service, integration with existing investments, etc.
I don't know if Sony will collapse eventually, but sticking to hardware only is most likely a deadend for Sony.
^_^
One can argue chasing the electronics is exactly the thing to move away from. Apple went from being a computer company to a services and media infrastructure company selling content; or at least investing enough in that side to sell their highly profitable hardware en masse. If Sony focus on electronics and ignore the changing landscape, they're almost certainly doomed, and very ironically considering they were preparing themselves for this changing landscape by acquiring content well in advance of anyone else. Hence Sony should be looking at changing from 75% electronics to 50% electronics or less, and getting into a far more profitable business.
This whole thread is about consuming media content. Sony should be trying to profit from that!
SedentaryJourney
Regular
I'm going to disagree here. I think the iTunes music store could be replaced by a 3rd party equivalent like amazon, and Apple would still continue to be successful. The reason Apple did it themselves in the first place was because at the time they couldn't outsource it to a 3rd party online store.
Apple is still very much a computer company, if you count iPhones and iPads as computers. All that matters is when you buy a mac or an iPhone that there's some store or integrated way to get content onto that device hassle free with one account for payments. What Apple seems to have over its competitors is that it puts a lot of effort into good design, not just for the hardware, but into simple UIs that simply get out of the user's way. Sony may have the consumer electronic expertise, but they could pick up a thing or two from how Apple integrates software services with their hardware. The actual media infrastructure could be third party or in-house, but this makes very little difference if the interface is bungled.
Another thing that's absolutely necessary is integrating your content into one simple to use service. There's only one iTunes, there should be only one Sony media store. This should be device independent for their hardware ecosystem. Sony doesn't necessarily have to get into the media services business to do so, but they might as well seeing as how they're an influential music publisher and movie studio.
There is a difference between having iTunes replaced by Amazon, or having a third party help run iTunes.
Apple already rent facilities to host iTunes servers. But there are definite advantages by owning iTunes.
The revenue from contents and network services can help to promote the hardware (e.g., During Back-to-School promo, Apple offers $100 gift cards). They can control their revenue mix better. If Amazon were to do it, it's more troublesome.
Nonetheless, integration is key.
It doesn't have to be just one. Apple has one iTunes, but hundreds and thousands of companies offer different media services, different business models as well, from Spotify to NetFlix to New York Times etc. etc. etc.
SedentaryJourney
Regular
I'm not saying Apple should get out of the iTunes business, but they're not dependent on it. It accounts for 5% of revenue. I don't have recent figures on profits but I'm willing to bet it's not that profitable compared to high margin hardware. If Apple is the model, I don't see why Sony should transition from being 75% electronics to 50%, especially since 90% of Apple's revenue comes from electronics.
That's true, it's good to include netflix and other services as an option. Sony already does this. However, the default store should be integrated. Also notice that none of this means that Sony has an imperative to dramatically restructure itself away from being a consumer electronics company. They just have to do what they're currently doing, only better -- like Apple.
Perhaps because without a strong content tie up and ecosystem, Sony will lose even more business in the future. ^_^
The % revenue is only a snapshot. It does not indicate the future, and it does not measure other secondary effects, like lock-in, and the importance of AppStore to iOS devices. It also does not describe the landscape (e.g., the increased size of the pie).
iTunes is one of the foundations of Apple's consumer business.
* iOS devices took off only when iTunes came online with their amazingly lax DRM during introduction. One year prior to iTunes launch, iPods didn't really hit its stride.
* iTunes' economy of scale allow Apple to offer cloud services, and AppStore services more cost effectively.
* Moving forward, you'll see Apple market cloud services even more. All these are built on top of the iTunes platform. The FairPlay DRM should tie in with Apple + Disney's KeyChest DRM someday.
I think Sony's restructuring has more to do with cutting down the silo effect, and increasing efficiency.
Have they announced anything to move away from electronics ?
To be like Apple, it means they have to stack up software and network services, which is what they are doing now. Although I would caution that Sony should be like Sony instead of mimicking another company. They will end up doing things their own way anyways.
They should reduce the number of key SKUs though.
EDIT: Sony may find it hard to compete with Apple on Apple's turf. So they may want to partner with the bests in the business to round up their offerings.
Why would a global electronics giant move away from electronics?. Sony's problems are bad management. Sony electronics are a $60billion+ business.
SedentaryJourney
Regular
iTunes was definitely instrumental to the success of the iPod, no question. I recall reading however that Apple never intended to get into the music retail business, it's just that there were no good alternatives back in 2003. iTunes has given Apple a clear advantage but most of what Apple achieved with the iTunes store can be achieved without it nowadays. It's really just access to content through a single integrated service and a clean interface that really matter.
I agree Apple is in a better position to compete with Google because of the iTunes store, but Sony would probably partner with Google rather than build out data centers to compete with them. Actually five years ago Apple would have gladly partnered with Google, but that was before Google got into the handset game.
Sony just needs to ship units. I believe all the pieces are in place for Sony to get into the online retail biz in a big way, and that's definitely what they're doing, but to me the most critical aspect going forward is better product design across their lineup, especially when it comes to software and UI. It's what Apple does really well and what Sony could do again. They really need to recreate the magic of the walkman. I say it's critical because while the iTunes store was good for the iPod, the iPod was great for the iTunes store.
I don't think they're moving away from consumer electronics, but someone argued that they should focus on media services as a more profitable business. Sony will do well integrating network services into their products like Apple, but profitability will always be in hardware not media sales. Well that and game licensing.
Totally agree with simplifying product lineup and focusing on a small number of key products.
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I agree the ease of use and industrial design are key success factors. But they are insufficient. iPod had both in its first year but it didn't take off in a huge way. The iTunes ecosystem is the key reason it took off because (1) it further simplified the use cases by incorporating direct download, and (2) it freed the users from draconian DRMs common in that era.
I doubt the "Apple never intended to get into the music retail business" statement. It may be true before the iPod creator showed up in Apple. But the iPod business model was conceived with a sister online operation in mind from day one. Unfortunately, no hardware vendor would believe him. Only Jobs recognized the potential and made it successful. According to published materials, Jobs had to negotiate with the music execs for 2 years before the contracts were nailed down.
Today, iTunes is ever more important to Apple. At the beginning, like iPod, iPhone sold based solely on industrial design and ease-of-use. In fact, mobileme was problematic at launch. However AppStore and iTunes have further allowed Apple to build a self-feeding ecosystem for both app and media. Without both, iOS is significantly weaker because competitors like Google can just introduce cheap devices.
Which is why any iOS competitor need to deliver both the hardware, software plus the online experiences now.
Yes, Sony will need to integrate not just any network services, but a unique set of network services to stand out. As it stands, Music and Video Unlimited may be a fine start, but they are insufficient. From integration and user perspective, Sony should roll their game contents into the online platform as well.
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