Our Analysts

Sony’s the latest to pitch over the top

By Matt Stump, Nov 30, 2011

Maybe, someday, somebody will break through the wall and deliver a complete over-the-top package of live TV channels to compete with cable, DBS and the telcos.

But it won’t likely be Sony, even with all the heft it has in its Internet-connected TV and gaming console business.

Unlike Google or Apple, Sony at least has content creation as part of its DNA, with a movie studio, cable channels and Howard Stringer in the fold.

The Wall Street Journal reports Sony is making the rounds of NBC, Disney and others about providing it channels for any over-the-top service.

The Netflix experience should serve as a dose of realism that the current pay TV provider/programmer ecosystem, while it may have a few dings here and there, is not cracking.

Don’t expect Sony to gain rights to a complete replica of the cable model.

However, there is plenty of room around the edges for Sony to operate.

It already offers movies from its library on Internet connected TVs, both via its own app and through other content portals. There are thousands of movies in Sony’s library, and dozens of different business models attached to any of them, depending on their age and past success at the box office.

There are similar stratifications evolving for TV shows. Hollywood studios have found a willing buyer for past episodes of current series and library titles in Netflix. Some of the proceeds is new found revenue, other proceeds are replacing dollars form an evolving syndication marketplace, and some may even be cannibalistic, but it’s a small price to pay if overall media company revenue is rising, which is the case.

That same stratification could begin with cable networks. MSOs would love to jettison some networks that are part of legacy, that’s-the-way-we’ve-always-had-to-do business programming deals. In the constant leverage ebb and flow, some moribund networks may transition to a VOD/IP world, serving as the base for a connected device rollout.

It won’t be ESPN, but it could be whatever’s at the end of Disney of NBC cable channel long tail of programming.

Sony’s foray, just like any other foray, isn’t an all or nothing proposition. Sure, it makes for better headline, but the true areas of change are coming in gray areas, those areas on the fringes, where evolutions/revolutions start.