If you can't beat 'em, join 'em.
With sales margins down on traditional television sets, Sony is considering launching its own television network over the Internet. It's a subscription-based model that many consumer electronics companies are trying — some with success like Apple — as consumer electronics companies try to navigate a challenging economic environment. In Sony's case, it owns a number of popular TV shows and TV and movie production studios and is negotiating to acquire the rights to others, so, the new strategy just might be what the struggling technology giant needs to stay profitable.
Executives at the company say they are experimenting with a new OTT television service that would bring content from providers like NBC, News Corp. and various cable channels directly to viewers. Sony CEO Howard Stringer told the "Wall Street Journal" that the new IPTV network that will compete with traditional pay television platforms.
"I spent the last five years building a platform so I can compete against Steve Jobs," Stringer told the newspaper. "It's finished, and it's launching now."
Sony has reportedly approached several major media companies to negotiate the rights to offer their TV channels over the Internet in the U.S. Sony is seeking addition income streams to differentiate itself from other television set makers, who are also feeling the pinch of competition.
Sony already offers a wide range of Internet-connected Bravia TV sets, Blu-ray players and home cinema systems, as well as 18.1 million Internet-connected PlayStation 3 game consoles. Any of the devices could receive the new network.
The network can be added in a number of ways. One is to connect the TV set directly or via a set-top to the Internet to begin streaming content over IP. The same can done with the off-TV Sony devices and then connect them to any television set.
"Sony has a terrific combination of content and platforms, including PCs and the PlayStation, to leverage for such an effort," Charles King, principal analyst at Pund-IT, told E-Commerce Times (http://www.ecommercetimes.com/). King also said that Sony is desperate for something to lift it out of the doldrums of the past few years.
For Sony to succeed, said King, widespread acceptance would have to break from long-held behavior patterns. "It isn't just a matter of a technology or approach catching the public's attention," King said. "A successful strategy will also have to be big enough to displace or overcome entrenched competing stakeholders. That would, he said, include television and film studios as well as cable TV interests.
Sony has already built some expertise in the television program market. However, a big question remains if it can persuade channel operators to abandon traditional distribution partners and stream content directly to viewers. If it succeeds, traditional outlets could begin to unravel.
So far, the landscape is littered with failure. Google's Google TV has faltered, YouTube is struggling with its early TV channels and Philips has been experimenting for some time and not made a dent into the market.