The Sony Online Service Is Not An iTunes Competitor – It Aspires To Be Far Bigger

Another bombshell to drop out of Sony’s recent Investor/Analyst Meeting was the revelation of an upcoming online store called the “Sony Online Service.” While the name is tentative, the features Sony are planning for it aren’t and we should expect it sometime in 2010. But what does “Sony Online Service” really mean? Is it just the infrastructure of the Playstation Network with a new name and more multimedia? Hardly. This isn’t just another competitor to iTunes – its far beyond that.

The upcoming Sony Online Service will be a personal and premium digital ecosystem. In the first slide, you can clearly see that Sony will begin this process by enabling network connectivity with all of its digital imaging products throughout 2010 and beyond, enabling devices to upload, store and share their content online. This personal content (created by you) will coincide with the vast majority of Sony’s entertainment offerings, including music, movies, games, and books. Sony will also embrace many 3rd party content providers to bolster their initial offering – something they have proven themselves capable of with their current partners in the Playstation Store and streaming partners in their latest networked Blu-ray product.

However, one of the main focus points will be you.

“One of the things we really need to get into is the whole concept of user-driven content,” EVP Kazuo Hirai of Sony 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.”

It doesn’t stop there though – Sony also plans to offer streaming media, applications (including 3rd party), services (such as health/fitness, banking, etc), and shopping (such as the ability to buy products at SonyStyle). The great thing is that many Sony devices will be able to view the service, including VAIO computers, Blu-ray players, BRAVIA Televisions, and of course the PS3 and PSP. This will ensure that Sony products have access to the total entertainment experience.

Sony has also identified a problem with their current television strategy – there is little retention business. This means that once they sell a television, they can’t really make much money on it afterwards. Sure, if someone buys a HDTV from Sony, they might buy a Playstation 3, a Sony Blu-ray player, or a Sony home theater. But there is no guarantee that they will buy a Sony. That same consumer could buy a XBOX360, a competitors Blu-ray player, and a competitors home theater. It was clear to Sony, after witnessing the revenue success with the App Store for the iPhone, that a similar model must come to TV. With the Sony Online Service, Sony can enable consumers to make purchase through their televisions through microtransactions. Sony calls this the “Evolving TV.”

The Sony Online Service will leverage the Playstation Network infrastructure, meaning they will co-exist (at least initially). Only one user ID will be necessary to access the service. This is all a part of the “UX Platform,” meaning a common user experience across all products. This means that the appearance of the store should be the essentially the same no matter what device you view it on, whether it be through a Playstation product or on your BRAVIA, VAIO, or Reader. Sony has also noted in the slide above that there will be new mobile products that will be able to access the service.

The Sony Online Service will be part of a larger Cloud service, as demonstrated above. We’re still a little unsure of this slide, but essentially I believe Sony will make their televisions much more intelligent, essentially integrating the ability to stream content from one device to the next. An example of this would be integrating the functionality of the TDM-NC1 Digital Media Port into a BRAVIA TV. There are more plans for the Sony Online Service as well judging by this slide, but we will let you make your own interpretations.

So, when should we expect this total revolution in networked Sony products? Hard to tell, but 2010 seems to be the year.

“(We’d like to) at least get the service up and running within the next calendar year…earlier in the year would be obviously a lot more preferable,” Executive Vice-President Kazuo Hirai said in an interview with Dow Jones Newswires Friday.