December 17, 2006 10:03 pm

Sony searches for the future of home entertainment

In a non-descript office building a short distance from the Sony Pictures Entertainment studio in Culver City, a small team of people spend their days in a windowless laboratory trying to crack the future of home entertainment.

Packed with games consoles, PCs, speaker systems and wide-screen televisions, the laboratory is where Sony tests new platforms, technology and hardware as it tries to anticipate changing consumer trends.

Like other film studios in Hollywood, Sony is keen to find new ways to deliver content to audiences. Although studios continue to generate good returns from the sale of DVDs, growth is slowing so new distribution channels are being sought.

For Sony Pictures, the studio behind films such as the Spiderman franchise and The Da Vinci Code, the broad aim is to make its content available on as many platforms and formats as possible.

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

A shift is occurring though, with more people choosing to download films. “We have argued that you have to provide the consumer with a legitimate way to get movies digitally.”

The laboratory in Culver City has led the company’s attempts to find new ways of delivering content. It started taking digital delivery seriously two years ago when it launched a promotion allowing 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 “flashE memory sticks that could be used for viewing on mobile phones. “We sold out all inventory pretty quickly,” says Michael Arrieta, senior vice-president of digital distribution and mobile entertainment.

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

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

After the $65m acquisition of Grouper, a video sharing site, Sony has discovered another promotional outlet for its content.

The site specialises in user-generated content but Sony is also using it as a platform to promote Sony-owned content.

Perhaps most significantly the group is close to launching a download service for Sony’s PlayStation Portable, which could shake up the nascent market in handheld devices capable of playing video content. Currently, PSPs cannot play downloaded films.

Sony is in talks with online video providers such as Amazon, CinemaNow and MovieLink about launching a service.

The executives in the Sony laboratory say the group has adopted a “platform neutral” strategy, whereby content is made available on every distribution platform.

Given the popularity of iPods, the group has begun talks with arch-rival Apple about making its films available on the iTunes platform. “Issues remain” about Apple’s “usage models and security”.

Like other studios, Sony is concerned that there is no limit to the number of video iPods that can copy a film downloaded from the iTunes store. “What we don’t want is one person in a college dorm buying a movie and his friends being able to copy it.”

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