Sony Corp. will launch an online service next year delivering movies, games, music and books to its various products, as announced at a recent corporate strategy meeting. The service, which has been described by some observers as an "iTunes-like" offering, would allow people to download content to televisions, game consoles, and handheld devices. "This is something I’d like to get off the ground as quickly as possible," said Sony Executive Vice President Kazuo Hirai, speaking recently to various news agencies, including the Associated Press and Business Week. The company plans to get the service up and running in 2010, with an introduction early in the year being "preferable."

A mix of free and pay content is envisioned. "One of the things we really need to get into is the whole concept of user-driven content," Hirai said in an interview. "There already are a lot of services out there but we want to try to bring something that is uniquely Sony to the experience." The company is also said to be planning to re-enter the Japanese market for e-book reader devices.

The introduction next year of Sony 3D TVs is expected to foreshadow a new wave of 3D content in the form of movies and games. "I’m a firm believer in 3D, said Hirai. "It really does enhance the game playing experience. There’s no question about it. It just makes it more exciting." According to IndustryGamers, a Sony Computer Entertainment America spokesperson also underlined the importance of 3D to Sony’s recovery plan. "We plan to make all the existing PS3 systems to be stereoscopic 3D compatible through a system software update," they said, "but the timing is not yet decided at this time. As for the stereoscopic 3D game titles for PS3, the plan is to release them in conjunction with Sony’s 3D TV launch next year."

(Note: Insight Media has just released a 330-page report on 3D Gaming; for more see; http://www.insightmedia.info/reports/2009s3ddetails.php)

The CE industry has often been plagued by the "chicken-and-egg" syndrome, where neither side of a new value chain wants to move first. When color TV was first introduced, the problem was attacked head-on by the massively-vertically integrated RCA Corporation, under the helm of visionary David Sarnoff. With the company controlling the production and distribution of content, broadcast facilities and equipment, and TV receivers as well, they could move as a united front into the market. However, in the latter half of the last century, under mounting foreign competitive pressure, companies like RCA began moving away from the vertical integration model, and sold off their assets, especially those in the consumer electronics sector.

Sony is now returning to a streamlined version of that model, that parallels most of the original RCA portfolio of businesses: electronics, movies and music, plus games, but minus U.S. broadcasting licenses, which the FCC specifically excludes from foreign ownership. "That’s the kind of combination that I think is not seen anywhere else," Hirai said, playing up the company’s possibly unique position.

Sony is targeting 300 billion yen ($3.2B) in annual sales and 350 million network-connected products by the fiscal year ending March 2013 from the venture; Sony chief Sir Howard Stringer is saying that 3D overall will generate $10 billion for the company in the same time frame. Coming after a loss of $1B for FY2009 and an expected similar loss for FY2010, it’s an optimistic prediction-but if anyone can pull it off, it could just be Sir Howard. -agc