Sony to Launch New Video Download Service For the PSP in 2007

Sony’s UMD movie format may have failed but that is not stopping Sony from launching a new video download service to bolster its PSP as a leading handheld entertainment device. According to Garrahan of Financial Times, Sony, which has sold more than 20m PSPs worldwide, expects to launch the new PSP video download service in the first quarter of 2007 after tying up deals with Amazon.com and online video providers (such as Movielink and CinemaNow).

Naturally, downloaded videos (via PC) will be transferred onto the PSP’s Memory Stick Pro Duo for video playback – a 4GB MS PRO Duo is capable of storing 10 feature films. In addition, the upcoming service will not require the launch of a new version of the PSP.

*full article after jump

Sony plans to gatecrash market for downloaded video Distribution channels are sought as DVD sales growth slows, says Matthew Garrahan
By Matthew Garrahan
Financial Times (London, England)
December 18, 2006 Monday; London Edition 1; Section: Companies International; pg. 26

Sony is to gatecrash the fledgling market in handheld devices to play downloaded video content early next year when it launches a service for the PlayStation Portable.

The decision, which could threaten Apple Computer’s grip on the video download market, will allow PSP owners to download a film from the internet to a PC and then to transfer a single, legal version of the film to a Sony device.

Sony, which has sold more than 20m PSPs worldwide, expects to launch the service in the first quarter of 2007 after tying up deals with online video providers.

Crucially for Sony, the service will not require the launch of a new version of the PSP.

The new PSP service has been developed by Sony Pictures Home Entertainment and will use the Japanese company’s memory stick technology to store the video content. Sony is distributing a 4Gb memory stick capable of storing 10 feature films.

Amazon.com and film download sites such as Movielink and CinemaNow are in talks with Sony about signing up to the service.

But the PSP service will not be compatible with Apple’s iTunes store, the dominant film download platform. Only iPod devices can download content from iTunes.

Walt Disney has made its films available on iTunes. Hollywood’s other studios have been reluctant to join Disney because of concerns about piracy: unlimited numbers of iPods can download copies of films that have been bought on iTunes and then downloaded toa PC.

Mike Goodman, a digital entertainment programme manager with Yankee Group, the research firm, said Sony’s PSP decision would “open the (video download) market up” for Sony.

Although the market is still immature, the industry is forecast to grow at an exponential rate during the next five years. Global revenue from online video sales will be Dollars 298m this year, says Strategic Analytics, the technology research firm. It expects the market to grow to Dollars 1.5bn in annual revenues by the end of 2007 and to Dollars 5.9bn by 2010.

Studios continue to generate good returns from the sale of DVDs, but growth is slowing so new distribution channels are being sought.

Sean Carey, executive vice-president of digital distribution and product acquisition for Sony Pictures Home Entertainment, suggests the industry would be happy to maintain the status quo of theatrical releases and DVD sales.

A shift is occurring however, as more people choose to download films. “We have argued that you have toprovide the consumer with a legitimate way to get their movies digitally,” saysMr Carey.

Sony’s laboratory in Culver City has led the company’s attempts to find fresh ways of delivering content.

It started taking digital delivery seriously two years ago when it launched a promotion to allow people who bought a Sony Vaio PC to download a legal copy of Spiderman from the internet.

More recently, in Europe, Sony began selling films such as Snatch and Layer Cake on flash memory sticks that could be used for viewing on mobile phones.

“We sold out all inventory pretty quickly,” says Michael Arrieta, seniorvice-president of digitaldistribution and mobile entertainment.

In September the group launched a service with Sprint, the telecommunications group, in the US, whereby customers could buy movies films for download to their mobile phones. “We think proprietary content will be delivered on all screens,” says Mr Arrieta. “Movies (on phones) will become pretty mainstream.”

Sony, one of the largest manufacturers of electronic goods, will benefit if consumers use its hardware to watch digital content. Sony Pictures has used its films to promote Sony products; in Casino Royale, for example, the Sony Ericsson M600 phone features prominently.