Company / division: Sony
Five major movie studios have banded together to join a successor to Disney’s Movies Anywhere service, which serves as a digital locker consolidating digital movie purchases across major retailers like iTunes, Google Play, Amazon Video, and Vudu. This is a pretty big deal, because the service was Disney only in the past and competed with UltraViolet, a competing platform. This partnership now brings together five of the biggest names in movies, and it’s fairly compelling – I just signed up and was able to consolidate my past purchases from iTunes, Google Play, and Amazon Video into one big collection, which I can now view on various devices and even download for offline viewing on a phone. That’s important to me because even though I’ve tended to favor one particular storefront over the last few years, I have at various times acquired movies on other platforms for pricing, availability, or testing purposes, and they’ve been kind of lost on there. This therefore feels like the first time something like this might actually take off in a meaningful way.
Online Pay TV Streaming Services Have Few Subscribers (Oct 4, 2017)
In a blog post I wrote in August about cord cutting in Q2 2017, I noted that there were likely around 3 million online pay TV streaming subscribers as of June, compared to around 4 million subscribers that had cut the traditional pay TV cord during the period those services had been available. The Information today reports that there are around 3.4 million of those online pay TV subscribers, including 2 million at Sling, half a million at AT&T’s DirecTV Now and slightly less than that at Sony’s PlayStation Vue, with just 200k at Hulu’s new live service, with a few more at YouTube. The Information uses this information to suggest that these services haven’t yet been all that popular, and that’s certainly one way to look at it, but given that until this year they mostly either came from unknown brands like Sling or were heavily limited in terms of their mainstream device support like PlayStation Vue, I’d bet we’ll see some faster growth going forward with the entry of Hulu and YouTube into the market, and I’d argue that AT&T’s rapid growth to the same scale as Sony in a much shorter period is evidence of that. With both Hulu and YouTube gearing up for big promotions in the coming weeks for their services, that growth will accelerate further. Meanwhile, cord cutting is also accelerating, and that acceleration is likely to be exacerbated by this growth in streaming options, leaving cable networks with fewer subscribers as users both cut and shave the cord. None of this is great news for the traditional TV industry.
via The Information
Sony has announced somewhat out of the blue that it has new PlayStation VR hardware coming, at the same price as its current hardware, but with better support for HDR and with integrated headphones, both of which features overcome annoyances with the current hardware. In some ways I’m surprised that the price isn’t going back up a bit – the recent price drops had seemed to be possible evidence that new hardware was coming, and therefore that Sony was clearing inventory, but it appears the price cuts we’ve seen essentially across the industry lately are here to stay. That, in turn, means that this is going to continue to be a crowded and price-pressured market, with little margin available in the early running as companies look to expand the addressable market beyond merely hardcore gamers, something that’s still proving tough.
Sony Discounts PlayStation VR Gear by $50 (Aug 29, 2017)
Apple Poaches Two Sony TV Execs to Lead Video Programming (Jun 16, 2017)
Apple has hired two executives who previously helped make Breaking Bad and The Crown on behalf of AMC and Netflix respectively as its new heads of video programming globally. Those two pieces of content are powerful examples of the role of original content in boosting video brands – Breaking Bad was a major plank of AMC’s push over recent years to turn itself into more than just a catalog player, and while The Crown isn’t Netflix’s most popular bit of original content, it’s very good and a sign of the kind of big-budget stuff it’s going to be making more of going forward. As such, these are fascinating hires, given that for now at least Apple is on the opposite of that process – commissioning rather than producing original video content. These hires could be a sign that change is coming, given that these two new execs have experience producing and not just commissioning video, but that’s a somewhat unusual model for original content compared with other major players like Netflix, which have still tended to farm out original content rather than lead production internally. It’s possible that they will merely become equivalents of Ted Sarandos at Netflix, using their expertise to commission and oversee outside projects, but they seem somewhat odd hires in that context. All of this, meanwhile, seems much less plausible in a continued narrow focus on video content in Apple Music, and much more as part of a broader push into video ahead of a subscription video service. Two other things worth noting: Apple put out a press release on the hires, something it does very rarely indeed, suggesting it wants to make a fuss out of this. Secondly, these two will report directly to Eddy Cue, which will set up an interesting dynamic with Jimmy Iovine, who has seemed to loom large over all of Apple’s content efforts, but especially in video, and who I’ve speculated before is a bit of a loose cannon in this area. I’m hoping these two coming on board provides some more clarity in who owns original video content at Apple.
Sony Announces 1 million Playstation VR Sales (Jun 7, 2017)
Sony results for the March quarter were out this morning, and they were a pretty mixed bag (this was also the end of its fiscal year, so some of the reporting you’ll see today relates to those year-end numbers, but I’ll focus on the quarter). The mobile business, which has has its share of ups and downs over the last few years, had another tough quarter, with a year on year drop in shipments and a drop back into the red following three quarters of profits. The music business did well but for reasons that have very little to do with music – the biggest boost in revenue came from a mobile game, while recorded music revenues were actually down as the twin declines in physical and downloads more than offset streaming growth for the third straight quarter. This is a problem I’m afraid will start to afflict all three major music labels in the near future. Sony Pictures had a down quarter and year, and had taken a big write down in the December quarter which affected full year results too. But the drop in revenues year on year was mostly in TV productions rather than motion pictures, which held up better. In gaming, Sony saw decent Playstation 4 shipments in the quarter, up a little year on year, and likely continues to lead Microsoft’s Xbox line by some margin as it has throughout this cycle.
via Sony (PDF)
Sony’s focus on premium continues with these new phones announced at MWC, one of which has been priced at $699, above the base price for other premium phones in the US, with the other not yet priced but featuring a higher end processor and therefore likely to go for even more. These devices also seem to continue the Sony design language of thin, relatively squared-off devices with lots of glass, which is still somewhat distinctive relative to other Android devices, but can make them seem fragile and also often makes them a little uncomfortable to hold. It looks like there’s some clever stuff with the camera, which will continually take shots when you open the camera app so that there’s literally zero lag when you press the shutter button. The big problem here is that what’s ostensibly the flagship, the XZ Premium, won’t launch for months, so any buzz generated now will die down entirely or be channeled into the less premium device instead. It’s also unclear from the reporting which US carriers will actually sell the phone, which is critical because Sony has had a tough time getting US carrier support for years now.
This is a rare non-MWC announcement this morning, but is interesting in context of all the mobile-centric news coming out this week. Sony has sold just under a million Playstation VR headsets since its launch – 915k as of a week ago – which is really very impressive given the installed base of Playstation consoles is vastly smaller than the base of smartphones in use. It also means this will be a useful revenue stream for Sony – at $400 a pop, that’s $360 million or so so far, which is probably as much or more than Samsung has made from selling / bundling its Gear VR headsets. I continue to believe that the next couple of years in VR will be characterized by a bifurcation between relatively small numbers of sales of high-end rigs from Oculus, Sony, HTC, and the like on the one hand, and larger unit sales (at much lower prices) of mobile headsets. Over time, a third category of standalone units will emerge and take some meaningful share, but for now it’s about these two extremes.
via New York Times
Sony Reports Results for December 2016 Quarter (Feb 2, 2017)
Sony’s been such an interesting company to watch over recent years, because almost every aspect of its hardware business has been challenged, and it’s even exited some, like PCs. However, it’s had something of a renaissance in the gaming space, with the Playstation outperforming the Xbox in the current cycle, and actually growing year on year in the December quarter. The other interesting hardware business to watch at Sony its smartphones, because it’s taken a unique approach for an Android vendor, which appears to be paying off. That approach has involved focusing the smartphone business on the premium segment, resulting in a smaller but more profitable business. Sony’s smartphone shipments have dropped by about half from 2015 to 2016, but its margin rose to over 8% in Q4, well above the low single digit or negative margins most consumer electronics businesses generate. There’s an interesting signal here for other Android vendors about what it could take to find success, though there probably isn’t room for more than one or two vendors pursuing this premium strategy.
via Sony (PDF)
What happened to virtual reality? – Business Insider (Jan 21, 2017)
This piece argues that VR is currently underperforming expectations, and hasn’t panned out the way many of its proponents hoped. In reality (no pun intended), I think most of the companies have been pretty realistic about the prospects for the current generation of VR technology – Facebook in particular has said it doesn’t expect Oculus sales to be material to its overall financial picture, for example. So this is as much about inflated expectations around VR that came from others – observers, proponents, fans – than from the companies themselves. But in some ways that doesn’t matter – the narrative was that VR was finally here and going mainstream, and now it’s becoming that VR is falling short of expectations. The first was misguided, and now the second flows from those misguided expectations rather than from actual performance in the market. VR is still at a very early stage, and though Samsung has sold 5 million mobile VR headsets, it’s mostly still a niche proposition today, limited largely to the hardcore gaming market. It’ll take both technological advances and much more compelling content to appeal to non-gamers.
Jaunt VR App Launches on PlayStation VR | Variety (Dec 23, 2016)
Content remains a critical component of making VR both mainstream and successful, and Jaunt is one of the interesting companies making non-gaming VR content happen. Getting its content onto all the major platforms is a big step.