Sony Pictures CEO hates the Internet

I wrote last week about Sony CEO Howard Stringer's comments suggesting Sony could have beaten Apple in digital music if only the had embraced open technology. While technology certainly could play a role in Sony's success, it's clear that the company needs a whole new way of thinking.

At a breakfast Thursday cohosted by the S.I. Newhouse School of Public Communications at Syracuse University and The New Yorker, Sony Pictures Entertainment CEO Michael Lynton told the audience his not-so-inner thoughts about the Internet.

"I'm a guy who doesn't see anything good having come from the Internet...(The Internet) created this notion that anyone can have whatever they want at any given time. It's as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, 'Give it to me now,' and if you don't give it to them for free, they'll steal it."

According to WWD.com Lynton tried out another simile. Referring to the Obama administration's goal to spread broadband access without, he said, regulating piracy, Lynton made a comparison with building highway systems without speed limits or driver's licenses. "We do need rules of the road," he said.

Rules of the road are one thing, but these type of short-sighted, borderline absurd comments suggest a more systemic problem. Instead of embracing new technologies and delivery methods, Sony chooses to stick to the old, now failing ways, as evidenced by the company's recent $1 billion loss.

With leadership like this, Sony only has itself to blame.

[DavidOgletree]

That is like Ford being mad that the Gov built highways.

[LinuxRules]

Who needs to what Sony movies anyway? Let them slowly rot away.

[SNOOP_ROCA]

ROFL laughing, apparently the branch of Sony that made PSN also hates the internet LOL

[make_or_break]

Sony's executive comments are CLASSIC old-school thinking, and the reason why they're having the problems--fiscal and otherwise--that they are. They hate what they can't control...or understand. Instead of embracing new concepts and models of doing business they'd rather fight it as long as they can, and only adapt grudgingly when they finally admit that they screwed the pooch at the bitter end. With this leadership, both on the administrative and engineering side, they'll probably NEVER understand how a relatively small computer company managed to crush them on their own (audio) turf.

[scottyrob]

lmao. One of the best comments I've ever heard.

[Tim.b]

Gees Dave, that's about as useless a commentary on the guy's position as I could imagine. No deeper insights? <br /> <br />That's 25 seconds of my life wasted. You should apologize to each reader.

[daverosenberg]

Try my post Could an open Sony beat Apple? (http://news.cnet.com/8301-13846_3-10237942-62.html?tag=mncol;posts) or news.com

[MPB]

gee's settle down if you don't like it don't read it. no one wants to here you complaining.

[hoopla]

I hadn't seen the Lynton comments, so I was quite happy to read this here. Yes the analysis is pretty obvious, but that is why it is short and to the point. You can't just print a quote and leave it at that.

[Alexander_Goldman]

@ Tim: <br />It's not all about you. This information is useful and insightful to others - myself included. You have to dig a bit deeper than the surface to see he makes his point very clear.

[make_or_break]

Kinda like what you should be doing because of your worthless commentary posting, eh Tim?

[Nathan_Never]

Good article and comment!

[jcomputm]

Oh my gosh. I have never thought that a person could hate the internet. That's pretty surprising to me.

[rapier1]

Really?

[evilbughead]

really try Sen Rockefeller for one who wants to have tyrannical powers over how the net is controlled, just another elitist who "knows" what good for us, say goodbye to you freedoms soon Web 2.0 will be here to save the corporations from the ,ahem , theft that is being perpetrated against them. Then again all that free stuff we currently enjoy for free will no longer be free just like the rights of avg. American citizens. http://www.infowars.com/rockefeller-internet-is-number-one-national-hazard/ .

[make_or_break]

What's really funny (and sad) about this is that the internet's been around for decades. It's not like Sony couldn't have seen its widespread adoption for general use coming if they had just opened their collective eyes.

[gerrrg]

Sony is grasping for excuses for a lack of innovation and quality engineering with thoughtful design.

[MPB]

Thats right. If Sony's CEO won't embrace the internet than they need to find a new one, REALLY FAST!!!! before they fall too far behind.

[unifex_]

That was Sony Pictures CEO, the movies studio, not the electronics firm!

[godo--2008]

Gerrrg, I must say that I have always liked Sony design, and feel it is second only to Apple's.<br /><br />The above comments by the Sony CEO are remarkably **** , however, and do not bode well for Sony.

[umbrae]

This mentality is share across all of Sony. The PS3 suffered from designs made by Sony Pictures which is why they put Blu-Ray in it even though the cost.<br /><br />Thing is that Sony has lost is innovative and engineering edge, and only looks for ways to limit us rather than set us free. Its not about getting stuff free (stealing) its about using things in a way that match our lifestyle.<br /><br />Sony just is an out of touch monster.

[k1m0d0]

Nice comments Dave. Sony top brass seem to share a common malady; they believe the world is flat.

[cvaldes1831]

My translation of Lynton's comments: "I am bitter because I'm still a toiler, unlike Terry Semel who cashed in on this whole Internet nonsense."

[docster87]

Kinda reminds me of how Sony operates in general. Ever since Betamax, their goal is to find a new format and rule with the money streams it generates. Saw how hard they pushed Blue-Ray? The PSP was supposed to usher in the UMD format. Sony is slowly learning (or since they won w/ BR, easing up) since the new PSP did away with the UMD minidisc. Sony didn't embrace MP3/internet delivery cause their holy model is to have physical format that they rule. How can Sony resell someone another copy of media that they already own? Release it on a new physical media standard.<br />My older brother's notion of why Pink Floyd sold so many Dark Side albums - everyone bought the LP, then when tapes were introduced, everyone had to buy that one album again. Then with CD, process repeated. Sony wants the money of repeat sells of same media on newer formats - and if everyone skipped having physical media, well that would have really hurt Sony's plan.<br />Sony didn't introduce BR just for our pleasure, they released BR so that we would be pressured to repurchase our favorite movies again...

[madz4444]

You have totally missed his point, partly because of the author's limited quote. Theft is a huge problem and one that studioes have to address. DMR is one means toaddress the problem that Stringer defines, and one that is, in fact, resisted strongly by those who believe that everything on the internet should be free. The Hulu controversy over content owners pulling their material to focus on television ratings, and the ensuing fury, bears that out Stringer's position of entitlement and internet user's belief that everything should be free.

[Synthmeister]

However, Sony has been consistently uncreative in figuring out ways to monetize the internet or digital media. ATRAC, mini-disc, memory sticks. All Sony could think of was locking people into their hardware and software. <br /><br />Even Apple allows to to load any mp3 or rip any CD to their iPods in various formats, none of them owned by Apple. <br />Sony's CEO apparently doesn't even realize that Apple got rid of DRM months ago.l<br /><br />And Sony completely ignores the problems of crappy hardware, crappy interfaces, overpriced memory sticks, crappy software and crappy internet music store. <br /><br />Sony equals epic fail since the beginning of the internet era and digital media. If they don't simplify BluRay licensing by this summer, even that might fail.

[katana0182]

It doesn't matter what format they put it in, the format will be cracked - especially with the one-way content streams of the movie and music industry. People have to see and hear, and if they can see and hear, DRM will be broken.<br /><br />As network speeds go up, new forms of P2P will become possible that allow anonymous filesharing by having several levels of peers who relay data, without being able to see what data they relayed, and then forget who they relayed it to giving uniform plausible deniability. Network neutrality is a fait accompli at this point, and with encryption, even deep packet inspection will be unable to separate non-infringing from infringing datastreams. Metered billing may result in the dataflow slowing for a time, but the marginal cost of bandwidth will decrease geometrically as pipe size goes up, and a real market in high-speed Internet will eventually develop. Unless the content industries embrace business models based on voluntary blanket licensing for home use or other models, like advertising-supported content, product placement, physical or digital added value for content purchases, the content industries are dead.<br /><br />This is excepting the computer and videogame industries, as the bidirectional interactive nature of games makes copy-protection, especially for multiplayer experiences, combined with generous single-player licensing models viable. Hint to game industry: ship no game without a multiplayer component, and change from no-play without license to game subtly breaks halfway through with pirate copy; or, take the Valve/Steam model, which has been very successful: basically those who steal Valve's games feel like absolute jerks, while those who do buy them are treated excellent, patches are frequent, user feedback is responded to, Steam adds value while serving as a transparent mild DRM client that protects the end user's investment and Valve's investment - by permanently preserving license, integrating the multi-player interface, allowing for transparent time and place shifting, and facilitating complete license transfer or lending.<br /><br />The content industries have to understand that with the rise of the Internet, they can't use DRM as a shield and expect it to work for long, because people don't care about IP for IP's sake; it doesn't matter to them, and the industries can't make it matter, except perhaps as a moral issue. Instead they have to figure out ways to extract value from the content that they have. Voluntary blanket licensing is one option. But there are other ways out there. They shouldn't hate the world because it changes, instead, they should change with it, and make what they can out of it. These industries can do it. They just need to come to terms with the age of strong IP being over (strong IP meaning IP that personal users (as opposed to commercial users) can be sued for infringing). Once they realize that simple truth, then, for them, anything is possible, they just have to go do it. Carpe diem, seize the day.

[dp273-condor]

madz4444 is mad I tell you!...<br />"....Stringer's position of entitlement and internet user's belief that everything should be free"...<br />Entitlement? What's free? I pay almost $60/month just for access at a reasonable speed. Don't tell me that content should cost more - They're already into me for over $700/year!

[teh_chrizzle]

madz4444:<br /><br />DRM is physically impossible. it's based off a faulty implementation of cryptography. cryptography only works when both parties (sender and receiver) care about protecting their keys. with DRM the reciever is also the attacker. when you give the decryption key to the attacker, you lose the game. forever.<br /><br />DRM not only fails to stop piracy, it actively encourages it by only punishing the paying customer. files don't get shared until the DRM is stripped.<br /><br />so rather than waste money fighting piracy, why not give customers a reason to buy? focus your money and effort on the people that are paying and stop worrying about piracy. the pirates have you out gunned, out numbered, and out smarted. the only winning move is not to play.

[dhigginx]

To dp273-condor, <br />So would the following be true as well... <br />I bought my car, well In making payments every month of more than $300.00. I pay taxes that pay for the roads and freeways that take me to my local Safeway. What is the store manager thinking by making me pay for my groceries, I already pay enough to everyone else...

[screamapillar]

@ dhiggenx <br />Your analogy is flawed because you are talking about theft - in which a product that cost the supermarket money is phsycially being deprived from said supermarket and thus they have not only the lost sale but also the cost of purchase etc. Piracy is NOT theft, it is copyright infringement. So the analogy should be more like: <br /> <br />Yes, I pay for my car, registration, tax for roads etc. Sony offer pay-for-use parking and I choose to park next to that at the free parking. Sony gets pissed because I parked too close to one of their spots, "infringing" on it, despite me not actually stopping anyone else from parking there, nor am I costing them a lost sale because i never would've parked there in the first place. Now I know my analogy isn't 100% but at least it is comparing infringement with infringement and not over-inflating the criminal element of it all to being theft - which the staute books and courts do not at any point define copyright infringement as theft regardless of how much the RIAA says it is. <br /> <br />But lets all be realistic - piracy isn't what caused Sony to lose $1billion. It was CEOs that hate their consumers that caused that. Organisational ideals that would prefer to wage a war of attrititian against competitors rather than just provide good products at a reasonable price. Wars cost money, Sony. You are paying for it. Try competing rather than just waging your anti-competitive smothering campaign.

[make_or_break]

madz4444: I suppose ROOTKITS were another one of Stringer's strategies as well, until THAT ONE blew up in their collective faces. I fully understand this almost manic need to want to protect their intellectual property, but none of these strategies seem to WORK, do they?

[bedney42]

Buggy Whip Makers Hate the Advent of Cars.<br /><br />In a shocking turn of events, the Buggy Whip Makers Guild of America announced that they "haven't seen anything good having come from the advent of automobiles... they created this notion that anyone can go in a speedy and efficient manner from point A to point B without having to worry about water, hay and horse manure..."<br /><br />C'mon guys -- tell us something we didn't know. The record companies, along with their RIAA goon squad, haven't been able to hold back the tide and, gosh, might actually have to change their business model. Of course, when that business model has made a few rich (and many, many of the actual artists have *not* shared in that fortune), they're gonna be the first to complain.<br /><br />The end of the 'coke and hookers' parties -- oh my God, its the End of Days...<br /><br />- Bill

[mattumanu]

I like how I'm automatically lumped in with the "if you don't give it to them for free they'll steal it" crowd. I happen to like paying for stuff online, in fact, I buy DVDs online, pay my bills online, buy music from amazon music store and now have dipped into amazon's video on demand... huh, come to think of it, I pay to do all of this.<br /><br />And these CEOs don't think the internet it worth it? I guess what they really mean is I'M not worth it.

[lordmorgul]

Like you, I despise this man's perspective that if I use the internet heavily for my purchasing needs, and communication, I must have a sense of entitlement and not be willing to pay for anything. I love paying for content, so much so that I DONATE to several services that provide me free content. This man is the one with the sense of entitlement; he believe he and Sony are entitled to control of information, control of distribution, and control over the quality and pricing of any product they are willing to sell me.<br /><br />Sony knows that information is power and they don't want us to have any of it. As a consumer, I am discerning enough to pay for products that meet my needs, on my terms, at my price-point, and are provided by a company doing a service FOR ME rather than treating me as their lap-dog possible criminal who cannot be trusted. My money will support Sony no more.

[nickh2]

Payback. Rootkits and bullshyt<br />I used to spend a whole load of money on Sony.<br /><br />Never again. When my Sony stuff dies. i'm looking at replacing with it with something else.

[technologyRules]

Good luck with that. It's doubtful you'll find better quality stuff from another vendor. And which company will you choose? They've all made similar mistakes.

[screamapillar]

@technologyRules - you're kidding right? Do you only shop at large generic department stores? Is that why you don't realise that other quality brands exist that outstrip Sony for quality and innovation in every area and are similarly priced (often cheaper). <br /> <br />You really need to gain some critical literacy regarding marketing and the products you are looking at. Sony is NOT even close to being in the top of the game quality wise. Even their elite stuff is like a high-end ford trying to compete with BMW when you pit say, Sony TV vs Loewe, or Sony stereo vs. NAD, sony mp3 vs iPod/Zune. I'm not trying to do a M$ vs Sony or anything like that, I'm sure all the consoles have pros and cons but don't be so ignorant as to think it is even remotely difficult finding a far superior product for the same or less cost. <br /> <br />nickh2 - I'd wish you luck but you don't even need luck with your quest - just enjoy being able to snub your nose at Sony and vote with your wallet, which in this capitalist society is your only true power.

[srgprod]

What don't they understand is that the world has undergone a revolution due to the creation and adoption of new technologies. Tehnologies that allow people to obtain media and entertainment in any way and in any form and at any time they so choose. The content owners need to realize that they are no longer able to control the flow of this content. Instead, they should try to adapt to this reality and listen to what people want and how they want to experience entertainment. Information is no longer under the owners control. Find meaningful ways to enable users and you'll be successful. Sony's problem stems from the fact that their culture grew out of the mindset that closed systems, control and proprietary product development is essential to innovation. This is not the case any longer.

[James Anderson Merritt]

While there are doubtless many "thieves" out there, most people are happy to trade value for value. Most of the cost in traditional media comes from production and distribution. People can accept and get used to a reasonable price that reflects those costs. If you then slash production costs and reduce distribution costs to almost nothing, then people expect to see a commensurate reduction in the price they pay for access to content. So I ask Sony and other media companies, where are those reductions?<br /><br />I am against media piracy. But on the other hand, I find it strange that someone like the CEO of Sony Media would rail so vehemently against the so-called "media pirates." Clearly he would like everyone to pay top dollar or refrain from enjoying his company's content. But suppose everyone were completely ethical in the way he desires. Then most of them would simply boycott his company's products altogether, decreasing the exposure his artists and he should crave, and very likely putting the company into a death spiral, as artists would abandon Sony for companies that charged customers less for content -- or might even sel;-publish for shareware returns or for free -- just so they could get an audience.<br /><br />What Sony should be about is deriving the maximum revenue from every piece of content they distribute. In the digital world, this means figuring out the maximum price point, at which the maximum payment revenue can be derived, from the greatest number of consumers -- then adopting a business model that ensures a fair and attractive slice of the pie for everyone involved in the content production and distribution chain. Once that price point is determined in each case, Sony should strive to maximize exposure and availability of the content under the decided terms. Kvetching about the consumer "robbing" them is only to invite well-substantiated complaints that record companies in turn rob artists blind.<br /><br />Sony should quit assuming that people are stupid. When they KNOW that 95% of the value of content comes from the creator, they naturally assume and even demand that 95% of the value they pay goes to the creator. If 50% of the costs are cut through digital methods, they expect that a $20 collection of songs on CD should retail for no more than $10 if downloaded, and so forth. When the media companies begin to understand and conform to those expectations, I expect we'll see a lot less "casual piracy." Value for value, media execs. Keep that in mind and you'll do fine.

[srgprod]

Sony has been hammered by the democratization that has developed on the world wide web. They and all other content owners are afraid. They have lost in great part the ability to control the flow of information that is commonly available to all of us now. Billions of dollars have been spent trying to circumvent the flow of their content and they have little to show for these efforts. Its very hard to profitably monetize these exchanges right now.<br /><br />It happening but very slowly. So the content owners are seeing declines in revenues year in an year out. They can't see where this ends so it scares the h out of them. Their jobs and the survival of their companies are at stake. Its a really horrible situation! What needs to happen is for these companies to listen to the people using their content and to nurture those that are providing innovation. Its not going to work by suing people and creating roadblocks. What will work is a change in attitude.<br /><br />The net is still being built. How it gets built out is essential to future success.

[screamapillar]

It is not Sony's role to control the flow of information. Information should be freely accessible as it is made FOR people so it should be available to people. Rather than wasting money trying to flog a dead horse, they should look at taking advantage of the situation. Sony are just pissed that they missed the boat in their attempt to be anti-competitive and rule the world

[Imalittleteapot]

I just don't get these people. I swear. You know, I'm not rich, but I've made a fair amount of money off the net and I don't have the resources of these big companies to do it with. You know just random freelance projects are enough to supplement my income to the point I can live debt free.<br /><br />I'm really just a regular guy and I've found a few different ways a person can bring in money from the net. It seriously concerns me that a CEO cannot figure out how to do what any average geeky kid can do. <br /><br />What's wrong with these friggin big companies and CEOs? I think they all need to hit the unemployment lines. I know hundreds of just everyday geeks, a few of which never even graduated high school, that make their livings off tech and the net. If I can do it and they can do it, anyone can do it if they just try. Even Gates is a drop out remember?<br /><br />If a CEO can't figure out how to bring in at least a little money from the net then they don't need to be a CEO. They need to be looking for another job. I hear Taco Bell is hiring for drive through. I used to date the manager in high school. Perhaps I could put in a good for the good CEOs if they play their cards right.

[ralfthedog]

I agree to some point, however, Complexity grows exponentially with size. As a person who has run a small business that has turned into a larger business I can say, no one you hire will do as good a job as you unless you pay them more than you are worth. <br /><br />You can find very good people, many more talented and harder working than you. Unless they have the perspective of a person who owns the company they will not understand the issues you deal with. A one person company is easy to deal with. A 15 person company considerably less so. When you get into the tens of thousands it becomes a nightmare. <br /><br />Is this person the brightest bulb in the hen house? possibly not. Could any random geek come in and do his job? I don't think so.

[Imalittleteapot]

Yeah ralf I completely agree. I couldn't be a CEO, but he is a CEO. So, while I couldn't do what he is supposed to be doing, it does sound like I could screw it up just as good as they're doing now.<br /><br />I mean, if Sony really tried they could pull something off that we couldn't even dream up. I couldn't, but what worries me is that while I couldn't be a CEO. I could probably be a screw up and screw it all up just as bad as some of these CEOs are doing now.<br /><br />While they could and should be doing things I could never dream of, right now the way this guys is complaining about it, it sounds like they're not doing much better than I would do in the same position and that's what really concerns me.

[gsmiller88]

And I think nothing good comes from DRM but does that stop Sony Pictures from putting it on every DVD they sell?

[jture]

This from the guys who brought you the rootkit, and continue to use a proprietary memory format in their cameras when the rest of the world has moved on to Secure Digital cards. Cry me a river, Sony.

[ralfthedog]

"...(The Internet) created this notion that anyone can have whatever they want at any given time. It's as if the stores on Madison Avenue were open 24 hours a day."<br /><br />I fail to see why this is a problem. I don't think a customer should be required to stand in line to purchase something.<br /><br />"They feel entitled. They say, 'Give it to me now,' and if you don't give it to them for free, they'll steal it." <br /><br />Theft is bad (If you want to call it infringement or a ham sandwich that is ok.). I artificially delaying the release of a product so you can get more money from another vector is just silly. If your customers want to give you money today and the product is ready, SELL IT TO THEM.<br /><br />Sony is effectively two companies. They are a good electronics company (They were a great electronics company before they contaminated their lines with cheep junk but that is another rant). They are also a software company that has great products they don't know how to market. Here is a hint, "Give the people what they want when they want and you will make money."

[srgprod]

That's precisely it. Give the People what they want, how they want it and when they want it. It works for Amazon, Ebay, ITunes, and thousands of other online ventures. Listen to your kids!! They'll tell you what needs to be done! Sony is very heavily invested in Entertainment. That was done so that they could leverage their hardware businesses. Now their hardware business has been emasculated and rendered largely ineffective. That was a result of a lack of future planning and the belief that they could contain and control their market by developing proprietary technologies and products that exist in a closed system. They need to throw that mindset out and join the rest of the world. They're trying, its costing them their survival. It would be great if they split this company up into more manageable businesses.<br /><br />Poor Howard Stringer! Poor Morita!!! Oops.....

[wshwe]

No wonder Sony is losing money!

[superswiss]

Mr. CEO, the Internet is not the problem. The problem is people like you who are still trying to rip of consumers. The Internet has done one thing, it turned uninformed customers into informed customers. With a few mouse clicks, everybody can comparison shop and research all the information about a product and make an educated decision. In the old days, the consumer was uninformed and didn't know when companies pulled one over on him. I know that scares people like you. Informed people start question the value of something they buy and here is the problem. Why can I rent a DVD for 24hrs for $1 at a Redbox, but have to pay $3.99 to rent the same movie online at outlets like Amazon or iTunes. The quality of a DVD is still better than any download today. Moreover, with 50" and higher flat screens at home, paying $20 for two to go to the movie theater vs. renting the movie when it comes out on DVD for $1 is really starting to become very questionable. The thing is technology has caught up but the prices haven't been adjusted to account for the shrinking value difference between watching a DVD/Blu-ray at home vs. going to the movie theater for example. Consumer feels ripped off and they have started to rebel. I think a large part behind piracy is the satisfaction one gets from the perception of sticking it to media companies like Sony who are unwilling to treat the customer fairly and with respect.

[infinitely]

Good point!

[screamapillar]

I agree superswiss with one andendum: <br />Mr CEO, piracy is not your problem. The movie industry continues to break previously set records. The highest pirated film was also the highest grossing film - this suggests that piracy did not impede the profits of that film. It may have even increased them, but that is another matter for another day. The point, Mr CEO, is that the internet isn't your problem, it is your view of the consumer is an enemy to be conquered. THAT is the problem. Stop trying to control us, we pay you, we control you. Learn.

[cvaldes1831]

Dear Mr. Lynton,<br /><br />Here's today's Marketing 1A lesson: "give the customers what they want". If they want their content via the Internet, give it to them that way. End of discussion. By the way, Steve Jobs passed this class.<br /><br />Thank you for attending class today, Mr. Lynton.

[nowayandnohow]

barely passed this class.... and now look at them (Apple)...

[lordmorgul]

Yes, now look at Apple, the largest digital format music distributor on the planet. Have they done everything right? No... DRM should never have been involved, but that has been corrected now, and the only thing still baring Apple from perfection in music distribution (in my opinion) is the low quality of 256bit AAC. An option to buy in FLAC or Apple Lossless would be awesome, because some music demands better than 256bit AAC can give, even with VBR, and some music does not. I'd buy some songs in 256 and some in lossless, and I'd pay twice as much for lossless if necessary.