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Sony Raises the Ante With Movie Downloads
26 Jun, 2008
Sony is flexing its vertically integrated muscle with news today that it’s going to begin providing first access to its blockbuster movies to users of their consumer electronic devices. Playstation 3 and Sony Bravia TVs will be the first products to receive downloaded video capabilities. The idea of downloading movies to game consoles and televisions is nothing new. But Sony is raising the ante significantly by giving their devices first access to Sony produced movies – ahead of DVD, VOD, and cable, DBS, and IPTV distribution. Sony announced the movie Hancock, starring Will Smith, will be the first movie to get this early release treatment.
The move is indicative of the fast moving digital media ecosystem and its impact on the competitive landscape. By being both a producer of content and of consumer electronic devices, Sony is exploring cutting out the distribution middle man with this strategy. They have their devices in millions of homes throughout the world. As those devices become Internet enabled, Sony has the ability to reach their customers directly, build a more robust relationship with them, and conceivably, extract more revenue from them. From a broadband carrier’s point of view, this move should be of interest on a couple fronts. Broadband carriers are increasingly distributors of digital media, and certainly don’t appreciate being bypassed. Additionally, the broadband carrier’s network is what allows companies like Sony to reach customers directly through the Internet. If this bypass trend builds enough momentum to have a material impact on a broadband carrier’s ability to grow their own revenue through the distribution of content, something will have to give. Call it net neutrality or something else, but I don’t see broadband carriers just sitting idly by, while their content distribution business dies on the vine. They control the pipes into the home. To some extent, that gives them a trump card. This issue will be one to watch.
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googleSkype Launches on Sony PSP
07 Jan, 2008
Sony announced the availability of a skype client on its PSP portable game player. Skype will be available on the PSP-2000 series, and will allow players to use the PSP as a phone, with skype as the underlying carrier and wireless Internet as the connectivity pipe. PSP players can download the skype client to their device later this month.
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Telecompetitor is a leading industry blog covering the telecom competitive landscape. We provide insight, analysis, and commentary on the issues and implications of the evolving telecom competitive landscape.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?