September 5, 2007 4:00 AM PDT

Does Sony finally have an iTunes answer?

Does Sony finally have an iTunes answer?
Related Stories

The iPod is growing up

September 4, 2007

NBC, Apple play game of brinkmanship

August 31, 2007

Blockbuster acquires Movielink

August 8, 2007
To Sony, the weak spot in Apple's iTunes fortress could be in video downloads.

Sony is preparing to launch a challenge to iTunes' video service, according to a story published Tuesday in the The Wall Street Journal. The Journal reported that Sony's effort would employ the PlayStation 3, the PlayStation Portable and Bravia high-definition televisions to offer some kind of download service.

The story, which, coincidentally or not, appeared the day before Apple has scheduled a major product launch, should provide grist for Sony bashers who can't wait to see the once-mighty Japanese electronics giant botch another effort to compete with Apple's iTunes juggernaut.

Skeptics would have a point. This is hardly the first time Sony has discussed a new digital download effort. Last week, the company finally buried Connect, its online music service that was doomed by infighting and buggy software. As for hardware, the PlayStation Portable, or PSP, could have run away with the mobile-video market. When it launched in 2005, it featured good storage and a larger screen than the iPod, but consumers were turned off by Sony's preoccupation with digital rights management and proprietary video discs.

"Unless the company can find a new approach, something that moves the ball forward, I don't see how this latest video effort is going to go in Sony's favor."
--James McQuivey, analyst, Forrester Research

"The PSP had a shot to define the mobile market, and that opportunity has now passed," said James McQuivey, an analyst with Forrester Research. "Unless the company can find a new approach, something that moves the ball forward, I don't see how this latest video effort is going to go in Sony's favor."

But before pundits ignore the latest nuggets of Sony news in order to focus on Wednesday's Apple product launch (which most observers expect to be the unveiling of new and improved iPods), they would do well to consider this: although Sony's execution in recent years may have been abysmal, it does have many of the tools to launch an offensive against Apple.

Sony could conceivably integrate Internet video across the PSP, the PS3 and Bravia high-definition TVs. The company owns Sony Pictures, one of the top motion picture studios, which could provide video customers plenty of content. In addition, that studio connection is now all the more attractive as it appears Apple's relationship with Hollywood is shakier than ever. Last week, NBC Universal announced that it wouldn't be renewing its long-term contract with iTunes.

Right now, Sony is trying to work the kinks out of the PS3 and PSP. When the company first introduced the PSP, it didn't allow users to connect to their TV sets, which prevented them from playing games or watching PSP videos on a big screen.

That problem has been eliminated as part of recent upgrades to the device.

Sony has also enabled the PS3 to record content that can be transferred to the PSP and confirmed that a video download store for the PSP is on its way. Last week, Sony upgraded the Walkman digital music player--which thus far has failed to dent iPod's lead--so owners can watch music videos and movie trailers on the device.

One of the biggest challenges confronting Sony, of course, is how it will bind a video game machine, portable device and TV set into a cohesive video offering.

"The problem Sony faces is that very few homes will have enough of those devices to build allegiance to Sony," McQuivey said. "The relationship with the customers is going to be fractured. The gamers are going to be in one place, and the Bravia owners in still another. Bringing them together and building loyalty will be a challenge, especially considering that early adopters have had exposure to iTunes for some time now."

But how important is it for Sony to catch Apple in the video market? While Apple is No. 1 in video downloads, revenue for the sector is worth about $300 million right now, McQuivey said. Of that amount, Apple likely generated about $200 million, he said. While the market is sure to get much bigger, just how much bigger is anyone's guess.

Nobody knows whether it's more profitable to offer pay-per-view content or give it away and support a video service through advertising. Plenty of TV networks have begun offering clips of shows on their own Web sites but attach ads. If this practice becomes widespread, it could undercut Apple's offering.

It seems apparent that music will remain Apple's bread and butter for a long time to come, and revenue from video sales represents only a tiny part of Apple's revenue.

And believe it or not, some people are still rooting for Sony. Chris Cardone, for example, an anesthesiologist from Cincinnati, is an avid iPod video viewer, or at least he was before he got his hands on the iPhone's bigger screen. He thinks consumers can only benefit from more competitors joining the video sector.

"I would prefer that there's competition," Cardone said. "At iTunes, I don't mind paying $1.99 for a show without ads. It's more efficient and takes up less storage, but maybe Sony or someone else can appeal to customers who might see price as a priority. I wouldn't mind having more than one choice."

See more CNET content tagged:
Sony PSP, Sony Bravia, Forrester Research Inc., Sony Corp., Apple iTunes

17 comments

Join the conversation!
Add your comment
it's obvious:
"Sony's preoccupation with digital rights management and proprietary <formats>."


Yep. That and the idea that a Sony customer should be a Sony only customer. Back in the 90's I was on that ship because Sony made things that cost right and worked great. Of course that was before DRM and internet piracy, and Sony seems to be just one step behind the RIAA in terms of respecting their customers in that arena.
No more for me, thanks.
Posted by skeptik (590 comments )
Reply Link Flag
Sony has nothing to win
Apple makes money selling iPods. The music and video service that Apple provides is meant to sell iPods. Apple doesn't care about competition selling music or videos so long as the music and videos can run on their iPods.

Like any business, Apple wants to make money from selling music and videos. Unlike Sony, Apple makes money from iPod sales regardless of profit from the online sale of music and video.

Too bad Sony's own proprietary system locked them out of this business model.

"I would prefer that there's competition," Cardone said. "At iTunes, I don't mind paying $1.99 for a show without ads. It's more efficient and takes up less storage, but maybe Sony or someone else can appeal to customers who might see price as a priority. I wouldn't mind having more than one choice."

What does Sony have to gain from selling its music or videos for less?

What can Sony gain from selling their music or videos for more?

Who would buy Sony music or videos if they could only be played on a PSP or with proprietary Sony software?

Sony has nothing to win.
Posted by Fat Drunk and Stupid (32 comments )
Reply Link Flag
While I agree
that it's unlikely Sony will win this fight (or that anyone will quickly overtake Apple in this sector - even given NBC Universals gameplaying with music and video removal), I can see that more than a few PS3 owners and PSP owners might want to download video to those devices. Especially if you're able to get that video in HD on a PS3 and you can't get any video in HD from iTunes at this time. The point is that they already own PS3s and PSPs, so ofcourse many of thing will be willing to do more with those devices.
Posted by Chevaliermusic (72 comments )
Link Flag
Sony has one advantage.
Apple does not make good root kits. Sony root kits are great! They crash my computers. This lets me know when it is time to go out and eat or sleep. I don't remember the last time I had one of my macs or Linux boxes crash. I could starve!

I think the perfect technology would be to put a Sony root kit in a Xbox 360. When it burst into flames, I would get lots of exercise extinguishing my house. This could be a better workout than my Wee!
Posted by ralfthedog (1589 comments )
Link Flag
Download your movie and get a rootkit for free!
I'm curious what sort of proprietary player Sony would require to ensure that they has sole control over content from their online store. iTunes is bad enough with infecting systems to inspire multiple other companies to come up with alternatives to give end users control over their own computer. What will Sony do to the system?

Their track record isn't very good in this area, I'm afraid. It should be interesting to see what develops.
Posted by Vegaman_Dan (6683 comments )
Reply Link Flag
Extra Extra, download from Sony and get a Rootkit!!
Along with overly loaded DRM music files that you can only play twice. After the second play your computer will self-destruct without any warning. Sony is trying to fight piracy so they are taking actions against it.

Extra Extra, read all about it!
Posted by bobby_brady (765 comments )
Reply Link Flag
NO more SONY for me
I love my SONY cybershot but given all the other problems I've had with SONY products, like CDs with root kits and nearly uneditable video formats. I'm really turned off of the brand.

The only thing SONY can offer me now is a huge apology and a large sum of money and I know that's not happening. So goodbye SONY. I hope you go bankrupt.
Posted by ShamusMac (22 comments )
Reply Link Flag
One thing at a time, . . . PLEASE.
Jeeze, how about fixing the PS3 line of junk? I have 2 games for the
PS3 that are ok. THeir latest title LAIR, the 18 million dollar epic
game, has all but bombed. The PS3 is still too expensive for the
average man to go out and buy, and the online service pales in
comparison to Xbox LIVE. Worry about the dam games please.
Posted by swiggins (73 comments )
Reply Link Flag
Sooner set myself on Fire
Sony at this point has little cred in this market. If Sony was smart (and they're not) they would stick exclusively to hardware where they at least competence.

Sony, give it up after Connect Music do you think anyone will be stupid enough to buy hardware "slaved" to a Sony service? Especially one where the hardware won't be just a cheap MP3 player!

Learn from Toyota, you work for the customer...not the other way around.
Posted by romanom (35 comments )
Reply Link Flag
If Sony is banking on PS3 to anchor their video download ambitions . . .
They are doomed.

Most people who might be interested in video downloads will look at the PS-3's on screen interface, then the game pad/remote, then the price tag of the PS3, and just say forget it.

Sony still doesn't get it. To sell a simple thing like video downloads through a complex, undecipherable gadget like the PS3 is just plain stupid.
Posted by tundraboy (494 comments )
Reply Link Flag
disagree
if the PS3 isn't doing something else (like computing for
Folding@Home), when I insert a DVD or blu-ray disk, it
automatically starts to play it.

Combined with the BD/Playstation remote control, it's very
nearly indistinguishable from a stand-alone player. And it has
many pluses over a standalone player, including gaming, the
ability to apply updates automatically, and the ability to serve as
a media endpoint.

I don't use it as the latter because it's a pain to set up UPnP
servers on my Macs and I have an ?tv anyway.
Posted by godofbiscuits--2008 (24 comments )
Link Flag
Chaps my Ass
Why does everyone try to improve what Apple does?
Why don't they come up with something on their own.
Does the Oriental mind just copy other people, then say made in
Japan. Most creative people are a pain the ass, as is Steve Jobs.
But he's our pain in the ass. Mac's Rule.
Posted by fastfred1 (13 comments )
Reply Link Flag
Let's hope so! Competition always good for consumers
Apple is highly polished and Sony has been a disappointment of recent years, however, I wish Sony great success in this arena against Apple. If they have the right pieces they can do very well.

Anything to challenge Apple or any other dominate industry players is a good thing for consumers IMHO.
Posted by onlyauser (220 comments )
Reply Link Flag
Normally, I'd agree
Except for the fact that every single one of Apple's so-called
"competitors" has offered less, has been more inconvenient to
use, and has demanded more of my money in return for their
services.

It's getting downright comical, now, but the One Thing that the
vast majority of aPpLe hAtorZ have failed to take into account, is
that Apple isn't "In Control" of anything. Apple does not create
the content that they resell. Apple has dozens of competitors.
Apple is in the drivers seat because they are the option that the
CONSUMERS CHOOSE TO USE.

It really is that simple, folks. Apple makes things easy to buy
things at a price that consumers deem to be fair, so we choose
to employ Apple's services.
Posted by GGGlen (491 comments )
Link Flag
Sony won't
allow purchases/rentals to be played on iPod/iPhone. My opinion,
but a safe one, I think.
Posted by godofbiscuits--2008 (24 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.