A Bravia New World: Sony Steps Out on Movie Delivery

By Tim Arango

The very future of how we consume media rests on the movie star shoulders of Will Smith. That is Hollywood hyperbole, but it contains a speck of truth.

Sony Pictures’ “Hancock,” starring Smith as a bungling superhero, will be available over the Internet, direct to U.S. viewers’ television sets, before its release on DVD. That is, if those televisions are Sony Bravias that are enabled with a Web connection.

The significance of Sony’s plans for “Hancock,” which is set for release in U.S. theaters this week, touches on two fronts: the future of movie watching and the future of the company itself.

Last week in Tokyo, Howard Stringer, chief executive of Sony, mentioned the “Hancock” experiment as he ticked off the company’s growth strategy for analysts. In doing so, Stringer gave the movie- watching public a rudimentary glimpse of the future: movies streamed over the Internet, directly to the television set, bypassing the traditional purveyors of content to the living room, the cable and satellite companies.

It also provided a vivid example of how the Sony founder Akio Morita’s vision of content and hardware co-mingling in profitable ways might be possible, despite many past failures.

“In some ways it vanishes the memory of the failures of the Sony Walkman,” Stringer said during a telephone interview from Tokyo on Thursday. Since he ascended to the top job at Sony in 2005, Stringer has focused on getting Sony’s disparate, siloed business units to work together.

“This is something that would have been unheard of five to six years ago,” he said of Sony’s movie studio and electronics division cooperating on “Hancock.”

Sony lost to Apple and its iPod in the drive to create the digital music device for the masses, despite the predigital-age dominance of the Walkman and Sony’s ownership of one of the largest music companies in the world.

With its Internet-connected televisions and content from its Hollywood studio, Sony is aiming to avenge its loss to Apple in music by being a dominant player in delivering video to living rooms of the future. Apple is gunning for the same thing with its Apple TV device.

“One of the most interesting things about this is putting the television front and center in the living room,” Stringer said, as opposed to the computer or a handheld device being the center for watching Web-streamed video.

Robert Wiesenthal, who is executive vice president and chief financial officer of Sony Corp. of America but also oversees corporate development for Sony, put it this way: “The Internet is a great place to get Web sites, but it’s also a great way to deliver conventional content. And at the end of the day, it has to get back to the living room.”

Now, consumers can download movies to their computers – an often cumbersome process but one that should improve as broadband speeds increase – and to the Sony Playstation 2, and the “Hancock” deal is a starting point to a future in which these all work together seamlessly in the home.

“Ultimately, when all these devices are connected you’ll be able to quite easily manage how you watch movies,” Stringer said.

Sony executives are adamant that the “Hancock” experiment is just that – an experiment that is as much about showcasing the potential of the Internet-enabled Bravia as it is about the future possibilities of movie-watching. It is not, they insist, a push to change Hollywood’s carefully calibrated timetables, or “windows,” governing the release of films in different formats: for cinemas, DVDs and pay-television.

In November, after “Hancock” has its run in theaters, it will be available for $7.50 with the click of the remote control for U.S. consumers who own Internet-equipped Sony Bravia televisions. Today the Bravia Internet link costs an extra $299 in the United States when purchasing a television, and only enables streaming, rather than downloading.

In a note last week, Rich Greenfield, an analyst at Pali research, noted, “While the content offered is only from Sony today, we expect other studios to follow if consumer interest becomes apparent.”

The experiment with “Hancock” suggests an obvious threat to the pay television industry’s own offerings, like video on demand. But cable companies, far from blind to the possibilities of other media companies leapfrogging them and accessing consumers directly, are working on their own devices that would allow Internet video to be streamed to the television.

In May, for instance, Glenn Britt, chief executive of Time Warner Cable, said at an industry conference that his company was close to offering equipment that would allow consumers to get Web content on their television through their cable box.

And Michael Lynton, the chairman of Sony Pictures, assured the studio’s distribution and retail partners – cable companies like Comcast, and Wal-Mart, which want to protect DVD sales – that they need not fear the experiment with “Hancock.”

“More than anything else, what this demonstrates is how the electronics company and the movie studio are working together in the ways they were meant to,” Lynton said.

Sony recently came out the winner of Hollywood’s war over the format for high-definition DVD – as its Blu-ray format became the standard. Studios have long relied on DVD sales as an important profit engine, and the sale of Blu-ray discs is still an early, unproven business. So the challenge every studio faces is how to be innovative without killing off existing businesses, and for Hollywood that means DVD sales.

“No one knows what the business model will be,” said Stephen Prough, founder of Salem Partners, an investment bank based in Los Angeles with a focus on media and entertainment.

“You do have to start with the premise that studios make the most money in the DVD window. And if they get enhanced pricing with Blu- ray they will make even more money.”

Stringer said that when creating a new service, Sony is careful to evaluate whether the digital delivery of content will have an impact on DVD sales.

“We don’t do anything without understanding the consequences for that,” Stringer said. “We don’t want to do anything to hinder Blu- ray.”

Originally published by The New York Times Media Group.

(c) 2008 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.

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