Sony has officially beaten out Dish, Verizon and several other would-be contenders in the race to bring new over-the-top video services to market.
With the soft launch this morning of PlayStation Vue, Sony Corp. (NYSE: SNE) unveiled the season's first new OTT offering designed to challenge the traditional cable bundle. The timing is a win for Sony, but several caveats to the service may put a damper on consumer enthusiasm, at least initially.
For one thing, the PlayStation Vue line-up is missing critical programming from Walt Disney Co. (NYSE: DIS)-owned networks, including ABC and ESPN, and from Time Warner Inc. (NYSE: TWX) networks, including CNN, HBO, TBS and TNT. For another, Sony has not announced pricing yet for PlayStation Vue, and the service is starting out only in limited beta, with a commercial launch not expected until the first quarter of next year.
PlayStation Vue will be available initially this month on an invitation-only basis to select PlayStation3 and PlayStation4 customers in New York. It will then proceed into a phased rollout through Chicago, Philadelphia and Los Angeles. The service will later become accessible on iPads and additional Sony and non-Sony devices.
During this beta period, PlayStation Vue will offer roughly 75 channels per market. Programmers in the line-up at launch include CBS Corp. (NYSE: CBS), Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK), Fox Broadcasting Co. , NBC Universal , Scripps Networks and Viacom Inc. (NYSE: VIA). It's not clear if linear content will be available from all of the networks.
Among the features Sony is highlighting with PlayStation Vue are its interactive user interface, catch-up viewing service and cloud-based storage solution allowing users to tag and save shows for up to 28 days. The interface includes a function called Explore that lets viewers filter content based on program type, genre, ratings, popularity, length and more. Sony is banking on the personalization and simplicity of the UI to appeal to consumers who may be frustrated with traditional program guides. The strategy has worked for major US cable providers like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cox Communications Inc. , who have seen significant business performance gains after debuting advanced cloud-based UIs. (See Comcast Coasts on X1, Data, Business Services and New Cox Guide Boosts Viewing.)
Sony said it won't reveal pricing details for PlayStation Vue until the service exits beta next year. But industry estimates suggest a subscription could cost between $60 and $80 per month. (See Sony, Dish Hit OTT TV Pricing Wall.)
In a significant business-model innovation, Sony has announced that PlayStation Vue will be available on a contract-free basis. Sony is also emphasizing that it will include no equipment or installation charges and will offer "transparent pricing," a dig at other pay-TV providers that have been criticized for tacking on hidden fees to customers' monthly bills.
There are far too many unknowns today with PlayStation Vue to make any predictions on business success. However, all of the advanced features and innovations in the world will only make the new service appealing if Sony can nail the right content package at the right price. Whether the consumer electronics giant can do that remains to be seen.
— Mari Silbey, special to Light Reading