Sony Corp. Plans to Offer Web-Based TV Service in U.S.

But Gives No Details on Content Pacts with Networks

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Sony plans to begin testing a web-based TV service in the U.S. this year, challenging traditional cable and satellite providers including Comcast and DirecTV.

The product will combine live programs with an on-demand library of films and TV shows, Andrew House, CEO of Sony Computer Entertainment, said Tuesday at the International Consumer Electronics Show in Las Vegas. The Tokyo-based company will also test a video-game streaming service for PlayStation consoles, smartphones and TVs.

The cloud-based efforts highlight CEO Kazuo Hirai's bid to remake Sony for a new generation of consumers who want easy access to content anytime, anywhere. Sony's products must embody the Japanese spirit of "kando" -- to inspire or capture users emotionally, Mr. Hirai said today from the stage at CES.

"We don't consider any product a success unless we have delivered that 'Wow,'" Mr. Hirai said. "The mission of Sony is to inspire and fulfill people's curiosity around the world."

Sony didn't offer details of any content agreements for the TV service. The company reached a preliminary accord to stream pay-TV programming from Viacom over the web, a person with knowledge of the matter said in August.

The game service, called PlayStation Now, will offer a subscription option and titles to rent, Mr. House said today. The company will demonstrate it this week at CES on its Bravia TV sets and the PS Vita handheld device, and begin testing in the U.S. at the end of this month. Full introduction is expected mid-year, Mr. House said.

PlayStation Now will deliver a variety of popular PlayStation 3 game titles, first on the new PlayStation 4 console and PS3 game system and then on the PlayStation Vita.

Since taking over as CEO in April 2012, Hirai has trumpeted what he calls a One Sony vision -- that he can deliver better returns making TVs, mobile phones and consoles under the same roof as movies and TV shows, video games and music.

To make One Sony a reality, Mr. Hirai has increased collaboration at the company's disparate units. In 2012, he sent camera engineers to the company's phone division to give the Xperia Z handset advanced photography capabilities.

"It's time to move beyond the just-good-enough era," Mr. Hirai said. "No more commodity products. We must and can do better."

Mr. Hirai stumbled in October when Sony reported a $180 million quarterly loss at Sony Pictures Entertainment, giving credence to calls made last year by billionaire hedge-fund investor Daniel Loeb, who urged the company to sell as much as 20% of the film and TV production and music businesses in an initial public offering.

But since then, Sony has scored a hit with the PlayStation 4, introduced starting on Nov. 15, which has taken the lead over Microsoft's Xbox One.

Sony sees Web-delivered content from its TV, movie and music units as crucial to turning around the struggling TV manufacturing unit, which hasn't made a profit in nine years and ranks fourth globally in revenue, according to Statista, a research service.

Obtaining rights to films and TV shows owned by others may be difficult and expensive, said Craig Moffett, senior research analyst at MoffettNathanson in New York.

"The digital rights issues are incredibly complicated," Mr. Moffett said in an e-mail. "Sony might therefore be required to get the rights not only for the networks, but also for the individual shows. And in many cases, those rights simply aren't available. They have already been sold to companies like Netflix."

~ Bloomberg News ~

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