Is this how Sony’s content/consumer electronics schizophrenia is going to be resolved? At least Apple figured out that they had to sell MP3 players that play MP3s.
From BusinessWeek: Imagine Sony On Steroids
[Sony vice chairman Sir Howard] Stringer has placed his biggest bet — $5 billion — in a bid to buy Kirk Kerkorian’s Metro-Goldwyn-Mayer Inc. (MGM ) studio. That would give Sony Hollywood’s largest collection of older movies just as new technologies for offering flicks on demand, over the Internet, and on DVD are taking off. That follows a November, 2003, deal he engineered to merge his struggling music company with rival Bertelsmann’s BMG unit. If approved by European and U.S. regulators, as expected this year, the merger will give the combined company 25% of the market while slicing an estimated $250 million from overhead. “For a while some of us weren’t sure what Howard did at Sony,” jokes former Viacom (VIA ) President Frank Biondi. “Now we see that he’s remaking the entire operation.”
And just in time. Stringer, Sony’s vice-chairman, is under pressure from Sony CEO Nobuyuki Idei to cut costs by 10%, part of an overall corporate mandate to reduce overhead companywide. At the same time, headquarters expects Stringer to help finally make good on the long-held — but rarely accomplished — goal of using Sony’s movies, TV shows, and music to fuel sales of new consumer-electronic formats. Sony executives would not comment for this story. [emphasis added]
[...] If it does win MGM, Sony intends to combine those films with the 3,500 it currently owns to help push a next-generation DVD technology, called Blu-Ray, that offers films in high-definition. Sony needs the added muscle of a large collection of films to help win over Hollywood, which is holding back, waiting for a competing high-definition DVD pushed by Sony’s nemesis Toshiba (TOSBF ), with help from Warner Bros. and possibly Microsoft (MSFT ). To promote its own format, Sony intends to start shipping versions of its movies on DVD and Blu-Ray in 2005, according to industry insiders. Sony “knows that getting a library is key to the Next Thing — in this case video-on-demand or the Internet,” says DVD pioneer and industry consultant Warren Lieberfarb.