Marketplace is a public service newsroom powered by you. Give Now

Sony plans to offer first Internet-based cable TV

Nova Safo Dec 22, 2014

Sony plans to offer first Internet-based cable TV

Nova Safo Dec 22, 2014

The new year promises several new Internet-based streaming TV offerings that will look a lot like traditional cable. The planned services from Dish Network, Sony PlayStation and Verizon will be the first to offer bundles of live television channels over the Internet.

Sony Entertainment Network, separate from the film studio that is dealing with the aftermath of an unprecedented cyber attack, is the first out of the gate with its announcement of the cloud-based TV service PlayStation Vue. It began beta testing the service in New York in November, with plans to roll out the invitation-only beta to Chicago, Philadelphia as well as New York.

Sony says it will launch the service in the first quarter of 2015, but has not decided in which markets. It also eventually plans to make the service available on iPads and other devices.

The Playstation Vue is starting out with about 75 channels, such as MTV, Comedy Central and Nickelodeon. Sony has not struck a deal with Disney but is in active talks. Disney owns ESPN, the sports channel that is a popular draw among a large portion of cable TV subscribers and commands the highest carriage fees on cable.

“They are under a lot of constraints. They have to pay a lot for content,” says Colin Dixon, a media analyst at nScreen Media.

Dixon says Sony not only must offer enough channels at an attractive price, but also manage to attract a young demographic that is avoiding cable. 

“The young are much less interested in pay TV service than the rest of the population. So, it’s going to be a challenge to get people to change,” Dixon says.

Sony, though, says its challenge is different. Many PlayStation users do have cable TV subscriptions, according to Sony, but rarely use them because they want a better user experience.

The company says it has not yet decided how much the service will cost, but promises transparent pricing without added charges and long-term contracts. 

Instead of primarily targeting price-conscious consumers, Sony PlayStation is focusing more on improving the cable TV user interface by marrying traditional cable with a cloud-based, Netflix-like user interface, which allows for live and time-shifted viewing, and recommendation lists.

Sony’s Playstation Vue, once it debuts, is likely to face competition in 2015. Verizon has announced similar plans, and so has satellite TV provider Dish Network.

Laura Martin, a cable and media analyst at Needham & Company, says Dish Network’s plans in particular are significant, because it will be a pared-down, cheaper alternative to traditional cable.

“So, it’s a way to go after the low-end of the market, which is the opposite of the Sony product, which is trying to cream skim the top end of the market,” Martin says.

In either case, the new offerings aren’t likely to threaten traditional cable TV, Martin says, but will lead to big wins for one particular group. 

“The big winners here are the content owners,” Martin says. “For example, Turner broadcasting used to have three or four new series a year. This year it has 12, because you can … sell it to more outlets.”

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.