Sony Sees Weak LCD Prices, Better Music Service

[Ishiyoshi]

Source: Reuters

Sony Sees Weak LCD Prices, Better Music Service

Fri Jun 24, 2005 01:04 AM ET

By Franklin Paul

NEW YORK (Reuters) - Sony Corp.'s (6758.T: Quote, Profile, Research) U.S. unit is looking to high-resolution cameras and televisions and a beefed up online music service to breathe life into its troubled brand, but profits will take time to improve, company executives said on Thursday.

Sony Electronics, Sony's largest unit, expects improved demand for big screen TVs, such as its Grand Wega line, but sees prices dropping for liquid crystal display (LCD) TVs this year, making profit margins very tight and perhaps forcing smaller players out of the market.

"This is not going to be an easy holiday season for anybody," Stan Glasgow, president of Sony Electronics' U.S. consumer sales, told Reuters after a press briefing. "(The TV market) has become much more competitive, which is going to take price points lower and lower."

Glasgow added that while the proliferation of flat panel TV makers has deflated prices and pinched margins, that same phenomenon will eventually push smaller players out, leaving perhaps three or four major brands.

"We are going to take advantage of (LCD manufacturing alliances) to stay competitive in the marketplace," he said. "It is going to be tough, but we feel there is the capability of making money."

At a press briefing held one day after Sony Corp. said that it would narrow its research and development focus, Sony Electronics' executives said they expect to launch new products more quickly than in previous years to compete with myriad devices such as Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research) iPod digital music players.

"We are making a push in the personal audio area," said Dick Komiyama, president of Sony Electronics. "Apple has done an outstanding job in creating a new business model using service and hardware. But we have a strong legacy in this area where we should be successful."

USING "CONNECT" TO BOOST WALKMAN

Sony decades ago popularized portable music machines with its Walkman line. But today, demand for the iPod and Apple's iTunes online music management service has dominated rivals, including Sony's newer Walkman players and its Connect music download system.

Connect is key to rebuilding attraction to the Walkman, Komiyama said. An easier-to-use Web site with choice of video and text content in addition to music could drive demand for Sony devices, including mobile phones and hard drive portable music players.

"We are improving significantly on the service level this fall," he said. "We are trying to establish a new scope for personal entertainment."

He declined to detail the changes to the service, including which videos would be available and what they might cost.

The company said it has also talked with XM Satellite Radio Holdings Inc. (XMSR.O: Quote, Profile, Research) and Sirius Satellite Radio Inc. (SIRI.O: Quote, Profile, Research) about developing new devices, though no deals are in place.

"We have been in talks with them for more than a year," Glasgow said. "Anything is possible."

Despite their long-term optimism, the executives noted that several new ideas, such as an expansion of the (UMD) Universal Media Disk video format used for movies that currently play only in Sony's PlayStation Portable (PSP) gaming device, may not be available in coming months, or even this year.

[Christopher]

To all -

What do you think could benefit the connect music service?

In my opinion, make a UMD burner and drop PSP's to $200 and enjoy complete market takeover.

[dex Otaku]

What kould improve it?

1 - listen to their customers

2 - listen to their customers

3 - listen to their customers

4 - offer other audio formats; especially important is at least one lossless-packing format

5 - at the very least, offer content at higher bitrates for those who can use it [even if I had money, there's no way in hell I'd pay to buy LP2-encoded music. Not a chance.]

6 - package deals on entire discographies such as iTunes offers

7 - use DRM on high-quality [i.e. bitrate] content; drop it completely on lower-quality [i.e. LP2-like bitrates] content

8 - use *reasonable* tiered pricing based on quality; if they made LP2-like content $0.30USD per song, they'd sell a hell of a lot more

9 - work at establishing a consortium between companies and researchers [like MPEG] to ratify a base standard for DRM that is codec-independent, that everyone can use, and don't dare charge liscensing fees to use it or any codecs. More content providers means more content available; that combined with a common standard for DRM and no liscensing fees for it [both for manufacturers and content encoders] means proliferation of hardware devices that support it; proliferation of devices that support it leads to ubiquity; ubiquity means more money going to everyone. Making the process more difficult with highly restrictive and complicated implementations, as well as charging money to use it, does NOT attract either content providers, manufacturers, OR customers - it drives them away. It may be fine for Sony to market their own system, but then that means that Sony customers can only listen to Sony music on Sony devices. They aren't the only manufacturer, publisher, or distributor on earth, for god's sake.

I can think of more, too.

[MZ-NH1]

Agree with both of you!

Specially - 4 - offer other audio formats; especially important is at least one lossless-packing format

And maybe start selling all your products in Australia, sooner, than making us wait 6-12 months

[bug80]

For me, the most important factor is higher bitrates, it is very unlikely I will ever pay for music encoded in LP2. The quality should be at least comparable with LAME standard/extreme preset, or OGG Vorbis q5/q6 (so, I guess Sony's equivalent is Hi-SP). Lossless is even better, of course.

Furthermore, I like the preview (or actually pre-listen) feature of iTunes better than the one of Connect: the sound quality is much higher and you see on screen how much time is left while loading the sample. With Connect, you just have to wait for the sample to play without getting any information.

Finally a compliment: I think the lay-out is good, less "busy" than iTunes. In my opinion they should use less gray, however.

Edited June 25, 2005 by bug80

[1kyle]

Until DRM allows the PURCHASER of Music to back it up, play it on whatever device(s) the owner has including one or MORE computers, and restore said music WITHOUT having to logon to the Internet here's ONE customer who will NEVER even THINK of purchasing music from a download service --whatever the quality of the tracks delivered.

It should still be possible to protect the content against illegal swapping or whatever.

Aloso don't forget the 50 year copy right rule as well Some of the old 50's and 60's compilations are not that far off the 50 year limit where stuff becomes in "The Public Domain" so DRM'ing this stuff or otherwise restricting access will be Illegal in any case.

D R M -- D(eath) to R(eal) M(usic).

As soon as DRM gets sorted out I might review this again -- but "It ai'nt going to happen".

Also SONY if you think the future is in Mobile Phone's --forget it --this market is already mature --just look in the UK wherere the number of outlets selling mobile phones has dropped enormously --there used to be at least 7 or 8 selling these on every high street in the UK --they are now charity shops.

A substantial number of people even have 2 or 3 phones so not much growth there --and who's going to watch a video on a mobile phone for "Whoever's up there's" sake.

Portable HD players DO have some part to play --but to be really useful the HD's need to be much more rugged and have serious capacities like 100GB and bigger -- and of course the bigger the disk the more inconvenience there is if it breaks, or you want to get a new one or it just gets lost. -- I certainly don't want to re-rip 600 CD's etc etc.

These HD players also make it impossible for you to lend discs to colleagues --probably why the were introduced in the first place I suspect as a simple way of stopping people "borrowing" discs and recording them themselves. However there's nothing illegal about lending a disc to a colleague who might actually buy a copy if he likes it.

Most people aren't "Pirates" --that buiness comes from very sophisticated groups in The Far East, Russia, China, and above all in Bangladesh where it's estimated about 8% of the entire country's GDP is made up of pirating Videos, DVD's, Computer Software and CD's. This dwarfs any amount of "Illegal File sharing" but it's a much tougher market to crack than worrying about a load of teens and pre-teens messing around on computers.

I think SONY execs why not disguise yourselves as "Normal Users" and see what CUSTOMERS actually want. By giving CUSTOMERS what they want sales rise, profits rise and shareholders also get happy --elementary business 101.

And please DO fix this DRM stuff --especially for people recording their OWN music.

New products aren't always the answer --fixing what you have first might be a good start.

Finally any SONY execs reading thiis --I could probably do a better job in predicting the market -- so why not email me --I'll do the job at 1/100 of the Salary you are offering your new guy (and I'll be really happy with that amount as well !!) and your company might actually make a profit and your customers will also be happy.

Cheers everybody

-K

Edited June 25, 2005 by 1kyle

[Syrius]

If Sony thinks that people are going to go ga-ga over text and pictures added to crappy 132 Kbps ATRAC files, they must be smoking some some sort of funky herb. Gimme at least Hi-SP dangnabbit!

[Bananatree]

A UMD burning machine would rock the freaking world if the PSP was cheap enough.

[dex Otaku]

New products aren't always the answer --fixing what you have first might be a good start.

Applause for that sentence. Serious applause.

[Christopher]

Well Sony isn't really keen on fixing things, it seems to prefer nullification instead. For the average person not in the know, it can seem as if Minidisc is dying or getting canned. Not true - plenty of patents in queue.

Things are just going to become more focused with more mature exploration of capabilities (think Hi-MD Video). Sony is listening to us, but they have to subdisize things accordingly; think about how things have progressed..just examine the equipment browser for example. It's just too much.

[bland10000]

...For the average person not in the know, it can seem as if Minidisc is dying or getting canned. Not true - plenty of patents in queue.

Things are just going to become more focused with more mature exploration of capabilities (think Hi-MD Video). Sony is listening to us, but they have to subdisize things accordingly; think about how things have progressed..

←

A refreshing note after having read many "it's dying" posts recently.

[Ishiyoshi]

hear, hear!

[Ug]

I would more battery, more quality, and ogg.

and less restriccions

[alpinexiv]

...

Edited April 1, 2006 by alpinexiv

[superkpt]

In a nutshell, Sony is a modern-day Hydra. I hope the new (non-Japanese) head can slay this beast and phoenix it into a more robust and focused company. Maybe we will see great MD products/solutions from Sony in the future. I, for one, do believe that a large group of people working for Sony have their weight behind MD. But all this refocusing and realignment may result in MD taking a back-burner to flash players and other tech.

The good news, I think, is Connect. They truly understand the debacle that is Connect and Sonicstage. Maybe one day we can all use a Sonicstage that is fast, that organizes albums as we wish, that has less DRM, and (this one annoys me the most) lets you queue songs before it starts transferring.

All I know is, MD all the way.

[Son cheeba]

The good news, I think, is Connect. They truly understand the debacle that is Connect and Sonicstage. Maybe one day we can all use a Sonicstage that is fast, that organizes albums as we wish, that has less DRM, and (this one annoys me the most) lets you queue songs before it starts transferring.

I agree. Sonicstage sux and the Connect store doesn't have the music that I want half of the time.

[doclloyd]

To all -

What do you think could benefit the connect music service?

In my opinion, make a UMD burner and drop PSP's to $200 and enjoy complete market takeover.

Lots of things, some of which others have mentioned already:

- More bitrate options/tiered pricing on bitrates.

- Video downloads! It seems like an obvious evolution, especially with the PSP being compatible with SS.

- Plug-ins to convert more audio formats to ATRAC, like OGG, FLAC, etc. so we can play those files back on all those Sony devices we own.

- I would prefer a better layout to the store. I sort of like the Connect Europe design, but it's not quite what I think would work best either. I like the news bits about artists, etc.

- Ease up on licensing for music and make stuff from Japanese and European artists available via the US store (and vice versa). It would be a bold move that other online stores haven't done (AFAIK.)

- More indie music, maybe allowing people to search based on region/locale.

- customer reviews on music, similar to Amazon.

- Easing up on DRM, like Warner Bros. only allowing you to transfer tracks to 3 devices.

- Somewhat tied to the store and SS is making moving your library to a different computer - or even a different location on a computer, easier. The backup tool blows, takes way too long and shouldn't require internet access to work (except to authorize any tracks you may have purchsed from the Connect store.)

- More HTML/CSS compliance so they can one day move off IE required integration.

I look forward to seeing what changes may come in Connect store. Small, slight changes are being made to the music store. It would be interesting to see SonicStage/Connect Player have the ability to play back video, though, especially since it has no ability to do that now.

[tekdroid]

paying CD prices for disposable music in disposable formats with disposable DRM. I'll never understand it. I can't believe people are accepting "less severe drm and higher bitrates" as alternatives to CDs. We are going backwards and actually *wanting* it? Uh, give me CDs. Give me real artwork and a real physical archival medium that I can do whatever I want with, whenever I want, however I want. And don't make me even choose between lossy bitrates. It's all a joke.

Good thing there's so little out there worth buying to start with. It's very hard to be tempted.

[mercury_in_flames]

To all -

What do you think could benefit the connect music service?

In my opinion, make a UMD burner and drop PSP's to $200 and enjoy complete market takeover.

so this is what they mean by not expanding umd media? are they going to keep producing the UMD movies?? Anyone else think the price of these movies is a rip off?

[Deanage]

paying CD prices for disposable music in disposable formats with disposable DRM. I'll never understand it. I can't believe people are accepting "less severe drm and higher bitrates" as alternatives to CDs. We are going backwards and actually *wanting* it? Uh, give me CDs. Give me real artwork and a real physical archival medium that I can do whatever I want with, whenever I want, however I want. And don't make me even choose between lossy bitrates. It's all a joke.

Good thing there's so little out there worth buying to start with. It's very hard to be tempted.

Absolute gold! Well written

Come to think of it, DRM on Hi-MD is kinda pointless. Your friend wants a copy of your new CD. Can't copy the CD? Just buy a Hi-MD and copy it to that (provided that you and said friend have Hi-MD walkmans, etc). If said friend has iPod, MuVo, whatever, just get them to bring it over and copy there and then (possibly the reason why you can't just plug & play with the new Creative gear like you could with the old gear. Record companies don't seem to like easy copying...).

[garyc]

so this is what they mean by not expanding umd media? are they going to keep producing the UMD movies?? Anyone else think the price of these movies is a rip off?

With you on this one GTR.. seeing as there are no extras, and probably very little in the way of audio options on these discs, do they even have Dolby Headphone?