LA Times: Sony to launch online video service for PlayStation 3

[mikemorel]

The company is attempting to stage a comeback in digital entertainment distribution.

Will the third time be the charm for Sony Corp.?

The entertainment and electronics giant is preparing to launch an online video service through its game console PlayStation 3 as early as this summer, studio executives familiar with the plan say.

The company has been in licensing talks with studios in recent weeks, according to these executives, who asked to remain anonymous because of the sensitivity of continuing negotiations.

The initial version of the service would include movies and television shows flowing from the Internet to the PlayStation 3.

It would follow two other disappointing online ventures backed by Sony in recent years: Movielink, which attempted to become the online equivalent of the video store for mainstream Hollywood movies before being sold last year to Blockbuster Inc.; and Sony Connect, the company's response to Apple Inc.'s iTunes download service. It shut down in March.

The latest service, provided through the online PlayStation Network, is Sony's attempt to stage a comeback in digital entertainment distribution. The maker of the once-dominant Walkman portable music player is still smarting from its defeat by Apple in the online music revolution.

"They've got to get a win in the digital, and I'd say on the electronic delivery side of the business," said Kurt Scherf, an analyst with Parks Associates who studies technology in the home. "That's where the future is. They've got to establish a toehold in that space."

The latest initiative seeks to harness Sony's strengths as a maker of high-definition televisions and consumer products as well as a creator of films and TV shows.

Sony is trying to capitalize on its Trojan horse in the living room, the PlayStation 3. The console is already connected to the TV and the Internet, and has sold more than 4 million units in the U.S. and 9 million worldwide, according to Wedbush Morgan Securities in Los Angeles. The console gave Sony the decisive edge in the battle to establish its Blu-ray discs as the standard for high-definition video in the home, trumping the HD DVD format backed by Toshiba Corp., Microsoft Corp. and others.

The new service would position Sony to compete with the growing number of Internet-connected devices and services that deliver video to the TV, including AppleTV, Vudu and Microsoft's Xbox 360 console.

Its biggest competitor would be Microsoft's Xbox Live service, which boasts 10 million subscribers who can sample online more than 4,800 hours of video, a quarter of them in high-definition. That includes 350 movies and more than 5,000 episodes of TV shows such as "Desperate Housewives" and "Lost," most of which go on sale on Xbox Live the day after their initial broadcast airing. Unlike closed networks such as Apple's, Sony plans to embrace open standards that would make its offering compatible with a range of computers and hand-held devices, including its PlayStation Portable.

Patrick Seybold, a spokesman for the PlayStation unit, declined to comment.

However, a PlayStation marketing chief acknowledged the initiative and promised more details soon in a post Tuesday on the Inside PlayStation Network blog.

"Many of you have been hearing rumblings about a video service that will allow you to download full-length TV shows and movies via PlayStation Network for North America," wrote Peter Dille, senior vice president of marketing for Sony Computer Entertainment America Inc. "While I don't have any new announcements . . . it's already been confirmed that we'll be offering a video service for PS3 in a way that separates the service from others you've seen or used."

One of the service's greatest obstacles may be Sony's own culture. Sony Chairman and Chief Executive Howard Stringer has been battling a corporate silo mentality in which divisions within his company work in isolation, undermining new initiatives. The PlayStation group in Foster City, Calif., has been notoriously aloof. Once, a former executive said, it scuttled plans for a movie subscription service for the PlayStation Portable even though Sony Pictures had supported the initiative.

What is more, the company, looking to safeguard its film, television and music holdings, has been an aggressive champion of copyright protection, often, critics suggest, at the cost of technological innovation.

"Sony has this blessing and curse of [having] some of the world's smartest intellectual property lawyers, who've never built or marketed a product in their life, who are good at saying, 'no,' " said Richard Doherty, senior analyst at consultancy Envisioneering Group in Seaford, N.Y. "The sun never sets on the Sony lawyers, they're around the world, in Tokyo, London, New York."

Sony insiders say attitudes are evolving under Tim Schaaff, a former Apple executive who is spearheading the company's latest plunge into online video. Schaaff joined Sony in December 2005 in the newly created position of senior vice president of software development and is helping the company, whose heritage dates to the transistor radio, appreciate the importance of deft software design in the digital era.

Online movie sales are still a tiny business and will remain small over the next year as DVDs continue to be the dominant home video format, according to Convergence Consulting Group. U.S. consumers spent $95 million for movies online last year, compared with $23.4 billion to rent and buy DVDs.

Nonetheless, market researcher Parks Associates projects that Internet video will grow more lucrative, reaping about $6.4 billion in revenue by 2010 from advertising, as well as paid downloads or rentals.

In the market, however, Microsoft has a head start.

"It isn't easy to do this," said Ross Honey, senior director of Microsoft's media and entertainment group.

"There is a lot of work to be done in just making this work and getting that movie up in high quality. We've had over a year's experience on how to do this, so we can focus on innovating as opposed to working out the kinks."

Doesn't the Playstation 3 represent about 85% of the worlds blu-ray players? If so, then this is a good thing for the blu-ray disc?

Holy moley - internet delivered video market going from $95 million to $6.4 billion by 2010. I'd say that qualifies as an explosion. Time is slipping away.

[bt12483]

so you buying a PS3 Mr. Digital download? oh, and was xbox live a good thing for hddvd (via the addon?)

[mikemorel]

Originally Posted by bt12483

so you buying a PS3 Mr. Digital download? oh, and was xbox live a good thing for hddvd (via the addon?)

Nope - why pay the money for a blu-ray drive I'll never use?

And no, xbox live was not a good thing for hddvd. Just like PS3 downloads won't be a good thing for blu-ray.

[Rob71]

Originally Posted by mikemorel

Time is slipping away.

[mikemorel]

Public perception will be that even Sony thinks downloads are the future. Public already thinks blu-ray is too high priced.

Why buy an expensive disc when something else is coming?

Sony is fighting a war against itself.

[mikemorel]

Originally Posted by Rob71

[Scripture]

Mike, you're not very coherent in the premise of your post. Time is slipping away for what or whom? Please elaborate in more detail just exactly what you're trying to convey.

Good article, but where's your underlying point?

[Squozen]

You keep arguing as if Blu-ray and digital downloads are mutually exclusive and cannot co-exist in the marketplace. I don't believe this is true. DD is a rental format (with several practical issues preventing it from dominating the rental space), BD is a purchase format (which is not without its own issues).

[Scripture]

Originally Posted by mikemorel

Public perception will be that even Sony thinks downloads are the future. Public already thinks blu-ray is too high priced.

Why buy an expensive disc when something else is coming?

Sony is fighting a war against itself.

Where's the public perception meter? You speak on behalf of the entire public now? That's news to me.

Try not to use phrases like "will be", as it only makes you look like a poor man's rendition of a gypsy fortune teller.

[Rob71]

Originally Posted by mikemorel

Sorry don't need to wait 'till next year.

http://www.hollywoodreporter.com/hr/...4080ce44d7b5c4

Also, I think we could both be considered fanboys by some. Difference being I don't have to scour the internet trying to find anything that could possibly put your choice in a bad light. It's not an option any longer.

[jcc]

Well, I have a PS3 and I am looking forward to having downloads as a choice. I doubt I will use it much though. I have had access to PPV on cable for a while, and have never paid for one. I just don't see it as much of a value proposition, personnally.

Back to the OP, the article includes a forecast that the digital distribution would reach over $6 Billion by 2010 (including ad supported content). That's fine, it's like using a TIVO, only they will arrange it so you can't skip the commercials. That's the way it is with ABC shows on line.

Home video competes with TV for the viewers time, and alwas has, but has thrived because it is considered a much richer experience. That will continue to be the case with Blu-ray being the best, richest, experience, advertizing supported TV being a cheaper, less pleasing experience, and movie downloads being somewhere in between.

[Coren]

Originally Posted by jcc

Well, I have a PS3 and I am looking forward to having downloads as a choice. I doubt I will use it much though. I have had access to PPV on cable for a while, and have never paid for one. I just don't see it as much of a value proposition, personnally.

This.


It will be a good thing for Sony, more value for the PS3, especially with it's successful HD media (Blu-ray.)

More reason for the PS3 to be the center of home media, as Sony has hoped for.

[Kotatsu Neko]

Originally Posted by jcc

Well, I have a PS3 and I am looking forward to having downloads as a choice. I doubt I will use it much though. I have had access to PPV on cable for a while, and have never paid for one. I just don't see it as much of a value proposition, personnally.

I guess it depends on how many times you watch your movies. I have many I have watched once and will likely never touch again. For films like that, online rentals have appeal I for me.

And by the way, your avatar is nice but the katakana under the Ghibli title is incorrectly cropped. It reads 'ojiburi'. You need to lose the first character.

[michealo]

must be tiring keeping the anti-BD campaign going, even fox2jk pretty much gave up.

conveniently ignoring that an "on demand" video market, aka cable, has been around for years and didn't seem to hurt DVD very much?

[bt12483]

Originally Posted by mikemorel

Nope - why pay the money for a blu-ray drive I'll never use?

Oh, thats right:

Originally Posted by mikemorel

Sorry Kosty - I played my hand, and lost. Too burnt out on next gen optical to jump back in and buy a BD 1.0 or 1.1 player, and don't want another game console. Maybe if prices come down, 2.0 players come out, and I'm bored I'll pick up a new toy next year (or not).

I'm getting into learning about the download thing lately. I think that has lots of potential going forward, and might be here sooner than many think. I'd hate to invest $1000s in yet another round of physical media only to find out that the Netflix/LG (e.g.) set top box rental/purchase service is the "next big thing".

The above post, which shows a glimpse into why you might indeed be bitter, still doesn't explain why you seem to want bluray to fail.

Just because you "lost" and are "burnt out" doesn't mean other people should also lose and be burnt out.

You made your decision - deal with it. Hating on people that made the opposite decision will get you nowhere besides being hated on back. As evidenced in most of your threads.

Once again, this is why people call you bitter. You actively hope for the demise of the only optical HD format left, because you got burned.

Enjoy your DD, but don't actively crap on HDM with your negative outlook (just because you lost once with HD DVD and are so certain that it will happen again with bluray via Digital Downloads).

Do you honestly think Sony would jeopardize bluray after all of the money that has been spent on it? Do you think you know more than all of the people working in the various departments at Sony? Do you think you know what their long-term plan is?

Spinning and speculating on articles will get you nowhere - just like your choice to support HD DVD did.

Now you are bitter, and want to ruin everyone elses day with your wild theories and projections about the growth of DD and how it will kill bluray in a few years (time is slipping away!). Good luck with that. I suspect it will be a lonely and hard fought battle that will amount to nothing as bluray will continue to grow and be supported by the studios and CE's.

I am sure DD will grow too - but regardless of that fact - there is no need for your constant prediction of death for bluray - especially since your "predictions" in the past only resulted in you being "burnt out on next gen optical ".