By Richard Menta 1/30/05
The admission by president of Sony Computer Entertainment Ken Kutaragi last week about his company's missteps in the MP3 arena seems like a precursor to Sony's announcement this week. The big announcement is that the company plans to launch a music service specifically for its upcoming PSP mobile games systems. Could this be Sony's transition to finally become a major player in digital music?
One has to give Sony credit as they keep trying. It was Sony who first sold digital music files of major label artists back in 2000. It failed. They also introduced one of the first digital music players that same year. It also failed.
Sony developed other digital music services like Duet/Pressplay and their most recent one Connect. None of these services have caught any traction while under Sony (Pressplay did after it was sold to Roxio, improved and renamed Napster). As for Sony's digital music players, even their most recent efforts have failed to make much of an impact.
So what makes this latest attempt to sell digital music products to American families any more likely to succeed? The answer is by leveraging something that IS a clear success for Sony - gaming.
Sony's new personal game player has already successfully challenged Nintendo's monopoly in this market in Asia. The buzz in the states is one of excitement that too should garner strong sales once the player is released here in March. These units have a number of capabilities, including the ability to play digital music.
Sony may not be selling a lot of MP3 players, but they will sell millions of PSPs. The expectation is that they will eventually sell as many of these units as Apple sells iPods. You can see where the opportunity arises for Sony.
The convergence of Sony's gaming and music interests is a sound market strategy, one that finally gives Sony a shot at challenging the dominance of iPod/iTunes. Right now Sony is just an also ran, behind not only Apple but Creative Technologies, iRiver, Rio, Archos and MPIO in the digital player market. In the paid download service they fall behind Napster, Real, and Microsoft's own service MSN Music. The Sony PSP can finally make them a major player instead of a minor leaguer.
But just because these game units can play digital music does not mean buyers will use it for that purpose. They will if the PSP is convenient and functions well. If it makes a lousy digital music player, owner will just pull out the iPod when they want to listen to music. If the PSP music service is as mediocre as reviews say Sony's latest Connect service is, consumers will buy elsewhere.
Of course you can't buy music elsewhere and expect it to play on the Sony PSP. That's because the PSP does not play the propritary files sold by iTunes and Napster. If this idea is to work, the PSP music service is critical to the strategy.
The bottom line is that while Sony's latest plan is a strong one, there is no guarantee of success. It has excellent potential with a clear direction, but more is needed this late in the game. Execution is where Sony must excel in. If they do they win customers.
The question is can they do it? If they can learn from their past failures, the answer is yes.
The Olympus m:robe MR-500i Digital Music/Video Player is available on Amazon
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The Digital Media Losers of 2004