Wolfe's Den: Sony Streams with Style

Who says Sony's a sinking ship? Santa and I would beg to differ.  Here's the deal: For years, people have been beating Sony up for its inability to refresh its lineup with latter-day Walkmans. Now, the commoditization of the flat-screen TV business is wreaking havoc with the consumer-electronics giant's revenue model.

Well, I'm here to tell you not to talk smack about Sony. That's because Santa put a new Sony Blu-ray DVD player next to my Menorah, and it was a revelation. (The DVD player, that is. My candles burned out after half an hour.)

Sony's trio of Blu-ray boxes, which begin at under $100, present as lowly DVD players. What they really are is streaming video-entertainment portals.  You wouldn't know that, though, because Apple and Roku have sucked up all the media oxygen in the streaming space.

In contrast, Sony has created a killer device that it's unfortunately messaging to consumers at mouse-like volume. So, yes, Virginia, if you're looking for a way to watch Netflix, Hulu, or Amazon Instant Video, Sony's the ticket. Actually, it's better, because you're getting what amounts to a DVD player thrown in for free.

I'm going to break my admonition from above, and do the trash talking myself: Hey Sony, how come your technology is so good yet your marketing so bad? Did you know that your S390 DVD player is number nine of Amazon's list of electronics best sellers? And that it's spent a Beatlesque 229 days on the top 100 chart?



On the entertainment front, Sony may still be reeling from the nearly month-long outage of its Playstation Network in mid 2011. (For those unfamiliar, PSN is the single most mission-critical connection for teenaged boys of all ages.) And its Sony Entertainment Network seems unlike to unseat the aforementioned Netflixes and Amazons of the world.  Indeed, there' s a cogent case to be made that those streaming content providers are themselves in the process of killing cable television, but that's for another post.

Mostly, Sony is screwed -- can I write that? -- by its financials. Sony lost almost $200 million in its recently reported fiscal quarter. To climb out of its hole, Sony is amidst a major restructuring, driving by the tanking of the HDTV television business. You can't cull cash out of a commodity market, and manufacturing flat-screen displays -- which is what TVs essentially are--is a low-margin loser.

So Sony is trying is refocus on cameras, video games, and mobile devices. However, as our own Junko Yoshida has reported, this isn't going to be an easy row to hoe.  Remember though that Sony had $79 billion in revenue for last fiscal years, which ended March 31, 2012. Difficult as times are right now, this is a company that I believe is fixable. However, a correction will only come if the Japanese ethos of consensus is infused with the type of boldness Sony's late co-founder Akio Morita used to bring to the table.

To loop back to where Santa and I came in, my Christmas DVD unboxing led me to the thought that, as regards Sony, everyone's putting the financial cart before the product horse. And it should really be the other way around.

I don't know if streaming video technology smarts will breathe new life into Bravias. I'm also guessing that the margins of video and DVD boxes must be pretty poor. Finally, I realize that an also-ran captive entertainment network can't be the blades to one's DVD-player razors if no one's interested in said network.

Still, to say that Sony can't do legendary products is to ignore the instruction sheet which didn't come with my S390 Blu-ray player. Actually, it did have an "operating instructions" manual, but that pamphlet made no mention of any of the available streaming network options, other than the one no one wants. Btw, as another example of Sony's tech brilliance, you don't need the manual to successfully set up the player. It sets itself up, and if not, just ask any kid living in your house if they've got 10 minutes to spare.

I'll close with a catty, but true, piece of revenue-generating advice for Sony: When you have great products, try to stock them in your stores. The Sony Style store in Long Island's Roosevelt Field mall was out of DVD players over the holidays. I found that out after the clerk I was talking finished clicking away on a keyboard, and asked whether he could order one for me, off of Sony's Web site.  

So I bought the player at Best Buy, proving that showroom aesthetics don't trump suboptimum supply chain management.