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.
Dave Rosenberg dishes up "Software, Interrupted" with nearly 15 years of technology and marketing experience that spans from Bell Labs to multiple start-up IPOs to open-source enterprise software companies. He is co-founder of MuleSource and currently serves as the general manager of Hardy Way. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can contact Dave via e-mail at softwareinterrupted@gmail.com or follow him on Twitter @daveofdoom. 
That's 25 seconds of my life wasted. You should apologize to each reader.
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.
The above comments by the Sony CEO are remarkably **** , however, and do not bode well for Sony.
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.
Sony just is an out of touch monster.
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.
Sony didn't introduce BR just for our pleasure, they released BR so that we would be pressured to repurchase our favorite movies again...
Even Apple allows to to load any mp3 or rip any CD to their iPods in various formats, none of them owned by Apple.
Sony's CEO apparently doesn't even realize that Apple got rid of DRM months ago.l
And Sony completely ignores the problems of crappy hardware, crappy interfaces, overpriced memory sticks, crappy software and crappy internet music store.
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.
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.
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.
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.
"....Stringer's position of entitlement and internet user's belief that everything should be free"...
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!
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.
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.
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.
So would the following be true as well...
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...
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:
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.
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.
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..."
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.
The end of the 'coke and hookers' parties -- oh my God, its the End of Days...
- Bill
And these CEOs don't think the internet it worth it? I guess what they really mean is I'M not worth it.
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.
I used to spend a whole load of money on Sony.
Never again. When my Sony stuff dies. i'm looking at replacing with it with something else.
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.
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.
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.
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.
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.
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.
The net is still being built. How it gets built out is essential to future success.
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.
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?
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.
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.
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.
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.
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.
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.
"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."
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.
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."
Poor Howard Stringer! Poor Morita!!! Oops.....
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.
- by cvaldes1831 May 16, 2009 8:18 PM PDT
- Dear Mr. Lynton,
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- by nowayandnohow May 17, 2009 7:55 AM PDT
- barely passed this class.... and now look at them (Apple)...
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- by lordmorgul May 17, 2009 1:29 PM PDT
- 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.
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Showing 1 of 6 pages (171 Comments)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.
Thank you for attending class today, Mr. Lynton.