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Cable Technology Feature Article

January 04, 2013

Could Sony be Trying to Break Dominance of Cable TV Via Virtual MSO Offering?

By Ed Silverstein, TMCnet Contributor

There is skepticism mounting over a rumored initiative by Sony to offer a virtual option to cable TV via the Internet.

Though not much is known about the company’s plans, one major challenge for its possible entry into the market is to get decent content for the service.

News came this week from Variety that Sony is currently meeting with two or more companies about licensing their content. If content is available, there is a chance the new service could be released as soon as this year, unnamed sources claimed to Variety.

Meanwhile, the rumored service was described in news reports as a “virtual MSO” (multiple system operator.)

“It would be a package of linear channels akin to what pay-TV distributors traditionally provide, only delivered via broadband connection,” Variety speculated in its report. “In contrast to the cable operators who are bound by a geographic footprint, a virtual MSO can conceivably offer TV service to any subscriber nationwide.”

“There would be no more need for cable,” Gizmodo added in a highly optimistic report.

But not every industry watcher is as enthusiastic over Sony’s rumored entry into the market.

“Sony has been quietly working to reach deals with content companies. It sounds like it's not working out very well so far,” the Business Insider said.

Both content and any additional infrastructure are expensive. Sony may not have the necessary resources after some challenging years. It’s a time for transition at the company with Kazuo Hirai, becoming CEO in April. Overall, Sony plans to eliminate 10,000 positions by March 2013 as part of a company streamlining process, TMCnet reported in October.

“Taking on a high-risk project like disrupting the cable industry doesn't make a lot of sense,” the Business Insider adds. “It's hard to see how Sony would be able to lower the price of cable for consumers, and thus hard to see how this thing wouldn't wind up dead on arrival.”

But there are a few reasons why virtual MSO may make sense – even for Sony, Variety said. Current multichannel providers face losses in market share because of price increases. Also, Sony already has a presence in many U.S. households with PlayStation 3, Bravia TV sets and Blu-ray players, Variety adds.

One option that sounds more promising, Business Insider reported, is Google (News - Alert) Fiber. It is still in its infancy. By the end of 2013, Google Fiber service will be installed in most of Kansas City, Kan., according to TMCnet. It may soon expand further, but a timetable is unclear.

Google is unique among the possible players because it’s installing a network of fiber optic cable rather than using existing infrastructure of other companies.

Meanwhile, Intel may also try to enter the similar television market, and Dish’s efforts in the field are being watched, as well.

Apple and Microsoft (News - Alert) dropped possible plans to enter the virtual-MSO market. Their new direction is to enter TV through partnerships. Microsoft has partnered with Comcast and other companies “to offer authenticated access to TV via its Xbox console, and the latest speculation on Apple (News - Alert) TV suggests a similar route could be in its future should it ever come to market,” Variety said.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Brooke Neuman

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