Has Sony (NYSE: SNE)’s Digital TV Service Already Failed?

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By Ross Schwartz on October 15, 2014 Technology & Software

Although Sony (NYSE: SNE) PlayStation 4 game console continues to thrive, a number of other gadgets introduced by the company have not managed to attract many consumers. Their latest digital TV may just get similar reaction. The product is not bad at all. In fact, paid TV streamed through the internet without a wired subscription is bound to unsettle the cable industry. The issue, according to The New York Post, is that the company wants to charge consumers for the cable-like service.

This latest internet-provided TV package will host 100 channels at a price of $80 per month, while another source revealed that the expected price is around $60 to $65, which is nearly same as the price charged for a basic cable facility. However, consumers may not readily pay for the service at the said cost. The reason for this is that Sony could not negotiate a la carte agreements with cable owners.

Sony (NYSE: SNE)’s digital TV is expected to attract consumers who are willing to pay the same price for cable TV as a wired subscription, so that they have it on their mobile gadgets. This may not seem like a good idea since Verizon (NYSE: VZ ) is expected to launch an a la carte digital service next year, and DISH Network (NASDAQ: DISH ) is planning a similar venture.

What Sony is doing?

Earlier this year, Sony (NYSE: SNE)’s CEO Kazuo Hirai declaredAt the Consumer Electronics Show, that Sony (NYSE: SNE) plans to create a cable-over-the-Internet service through the PlayStation game consoles. He also told The Los Angeles Times that Sony was striving to solve a big consumer hurdle, such as watching streamed video on one gadget and live TV on another.

However, consumers want TV provided on a fresh platform at a reasonable price. So, if the price of digital TV is similar to that of a wired subscription, it is more sensible to get regular cable because numerous cable companies give customers digital access to channels package.

Is anyone else doing this?

At a Goldman Sachs technology conference, Verizon (NYSE: VZ )’s CEO, Lowell McAdam, announced that Verizon (NYSE: VZ ) will deliver a pay TV package, unlike traditional cable. The price has not been released yet, as McAdam told PC Magazine that consumers didn’t want 300 channels on their wireless gadgets, so Verizon (NYSE: VZ ) will let them choose their channels.

DISH (NASDAQ: DISH ) is also launching digital TV, that will be cheaper than traditional cable. Variety reports that DISH (NASDAQ: DISH ) plans to start its digital TV service by the year’s end, that provides cheaper packages through broadband. The company wants to attract younger consumers who readily pay for cheaper digital TV.

What chance does Sony have?

Sony (NYSE: SNE)’s digital TV should either go a la carte or reduce its price, because, in present circumstances, consumers who are not likely to pay a price that high, for a service just because it came through a game console.