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The Impact Of Sony’s PlayStationVue TV Service

SAN MATEO, CALIF. — Last week, Sony delivered on its promise of introducing a new over-the-top (OTT) multichannel TV service that could disrupt the way people receive cable and satellite TV services.

The electronics and movie giant introduced Thursday a Cloud-based TV service that lets users watch live TV and on-demand content without a cable or satellite service, initially through the PlayStation 3 and PlayStation 4 gaming consoles.

The company’s Network Entertainment and Computer Entertainment divisions are starting to roll out a beta of the feature to select PlayStation users this month, Sony said. A commercial launch is planned for the first quarter of 2015.

The following are five takeaways from that announcement and the potential impact it could have on the consumer electronics industry:

1 Will PlayStationVue disrupt traditional cable, telco and satellite-TV subscription models?

That will depend on exactly how much it will cost viewers to watch individual programs, and Sony isn’t saying just how much yet. Content providers potentially could introduce a sliding scale for popular event-based programming that could frustrate viewers used to seeing such fare at no additional charge. On the other hand, viewers could potentially save hundreds of dollars a year by not paying for programs they never see.

There’s also the question of exactly what channels and programs PlayStationVue users will not have access to. Noticeably absent from the lineup are Disney/ ABC stations (including ESPN) and Time Warner channels, which has a vested interest in preserving the existing tiered subscription model. Also, what implications does all of this now hold for the proposed Time Warner Cable merger with Comcast?

Sony said it plans to expand the library from the initial 75 channels, but the logical competitive response is to withhold programming as platform exclusives, providing the FCC allows that to occur. Sony has the ability to hold onto exclusives for itself as well.

Meanwhile, DirecTV maintains its powerful NFL Sunday Ticket offering, which will continue to retain a sizeable chunk of its many long-time subscribers.

2 What do you think of President Obama’s net neutrality directive now?

The anti-competitive implications of allowing cable and telco providers to gate access to broadband subscribers with Internet fast lanes or data caps looms very large now, and the FCC’s new Title II policy decisions could have a significant impact on how this model succeeds. Stay tuned.

3 Ultra HDTV?

Sony’s announcement didn’t say if it plans to make any Ultra HDTV programming options available through the PlayStationVue platform, but it would seem to be a natural offering for both the company and its most important TV customers. Unfortunately, Sony left the prospects for 4K Ultra HDTV content availability a secondary consideration when it launched the PlayStation 4.

4 What about Sony Electronics?

The PlayStationVue came out of the Computer Entertainment wing of Sony and was positioned largely as a feature for Sony’s gamer audience, but the cord-cutting implications are huge, especially for restricted income households that may have no interest in video games. It might seem logical then to offer PlayStationVue as an OTT option in forthcoming Sony smart TVs (PlayStation TVs?) or in lower- priced set-top boxes these people could better afford. Sony isn’t revealing anything just yet, but with International CES right around the corner, we won’t have to wait long to see what happens next.

5 It’s beginning to look a lot like a PlayStation holiday.

The PlayStationVue announcement is one of the more compelling features Sony’s ever made for its multifunctional gaming system. News of the new solution for anxious cord cutters could significantly amp up demand for PlayStation 3 and PlayStation 4 consoles from gamers and non-gamers alike in the weeks ahead.

On the surface it would appear that Sony has finally one upped rival Apple in delivering a potential paradigm-changing entertainment product. Rumors have long-circulated that in developing an alleged Apple TV, Apple had tried unsuccessfully to develop something very similar to what the PlayStation is now preparing to deliver.

Still, many questions and loose ends appear to remain that could give cable, telco and satellite concerns plenty of room to respond. It looks like 2015 will be an interesting year, indeed.