Sir Howard’s gambit

The latest sacrificial lamb potential challenger to Apple’s hegemony over online media distribution is Sony. In the tongue bath of a story you would expect when the subject has given you a scoop, the WSJ ($) reports exclusively that Howard Stringer, the head of Sony, is rallying the troops to try to put together a combination iPod and iTunes killer.

Two years after taking the helm of Sony Corp., Chief Executive Howard Stringer is quietly preparing a big move to expand the company and challenge rival Apple Inc. in an area that has thus far promised more than it has delivered: video-downloading services.

People familiar with the situation say Mr. Stringer is planning to use Sony’s technology-packed PlayStation 3 and PlayStation Portable videogame machines, along with its Bravia high-definition televisions, to develop products and services to let users download television shows and movies, similar to the way they download music and videos using Apple’s iTunes store and iPods. A Sony spokesman declined to comment on the company’s strategy.

(Note how the WSJ calls Stringer “Mr.” The NYT calls Stringer “Sir Howard”; my understanding is that NYT style is to allow such illustrious personages to use the honorifics if they wish; so if they are used, it means that the person in question has requested it. Whenever I see things like that I think of the David Letterman riff on Al Sharpton: “I call him ‘reverend’ and he calls me “admiral.’”)

There are a couple of interesting things in the story. One, is it true that video downloads “have promised more than they have delivered”? The few times I’ve bought video from the iTunes Store it’s taken about 30 seconds. The problem isn’t a hardware or software one or anything that Sony is going to solve; it’s that the studios haven’t yet had the vision to serve their customers in an easy and understandable way. More on that below.

Second, there’s this part of the Sony strategy, a so-called “module” for its TVs:

Earlier this year, Sony introduced a module for its U.S. television models that can download Internet content. It will roll out a similar device in Japan this fall that will let consumers download videos from a number of Internet services. Meanwhile, Sony’s PlayStation unit last month launched new features for the PS3 and PSP in Europe that let consumers use their game machines to record television shows onto their PS3s and transfer them onto their PSPs.

As a consumer, here’s the “module” I wouldn’t like: Something that can hook me up with a single proprietary video download service. It might not have the content I want, and it might not be around in six months. Here’s one I would like: a simple expandable hard drive with a clear interface that will let me play whatever digital video I have or get anywhere simply and easily. “Expandable” is key because hard drives these days become obsolete much faster than TVs. I wouldn’t want to get a HD plasma set with, say, a 500GB hard drive welded shut inside, because that won’t seem like very much room in a year or two. But I would like one with an extra slot or two for expansion, that in a year or two I could toss a couple of cheap terabyte drives in. Sony could get the Bravia and Vaio folks to work together, right? Funny you should mention teamwork:

It is also a test of whether Mr. Stringer has succeeded in taming Sony’s fiercely independent corporate culture. In the past, the company has struggled to get its various units to cooperate with each other. An area like video downloading would require extremely close teamwork among the electronics, movie and videogame units.

Mr. Stringer has recently appointed executives with a track record of cooperation. One is Kazuo Hirai, the new head of the PlayStation group, who in June succeeded Ken Kutaragi, the headstrong creator of the PlayStation. Mr. Stringer also expanded the role of an electronics executive, Katsumi Ihara, who Sony officials say understands the importance of integrating compelling software with good hardware.

[…]

The people privy to Sony’s plans also say Mr. Stringer, over the protests of some executives, personally enforced a decision to adopt certain digital rights management software that will eventually be used in all of Sony’s products. That is an indication of how serious he is about making sure the company’s various units come together to make this strategy a success, they say.

Emphasis added. Companies like Sony have a different road to navigate, and one shouldn’t be glib. But it’s hard to see how yet another sally into the DRM rabbit hole is going to help the company. (And harder still to see how “personally enforcing” such an initiative is evidence of Stringer’s seriousness. Isn’t it instead an example of how he is resisting change?) The problem Sony will have is that un-DRM’ed material is going to be available, for free, on the internets and the sneakernets. The company, like many a media outfit before it, is going to be again in the position of offering consumers an inferior product … for more money.

This initiative is not, incidentally, going to be called “Hulu.” Hulu is the joint Fox ‘n Warners iTunes killer that says it will be going into “private beta” in October. You can go to hulu.com, by the way, and sign up to participate in the beta testing.

It is also not Amazon.com’s as-yet-unnamed music download service, which is supposed to offer DRM-free music.


No comments yet. Be the first.

Leave a reply