Sony Pictures Digital Entertainment is thinking about extending its Internet video-on-demand offerings beyond movies: It's working on a Web-based subscription service that would deliver same-day downloads of the popular CBS soap operas The Young and the Restless
and Guiding Light
to viewers who can't catch their regular broadcasts.
Sony demonstrated the concept on Sept. 24, at a Real Networks Inc.-sponsored conference in Seattle. The demo allowed viewers to access the soap operas through Sony's Soapcity.com Web site using Real Networks technology.
"We're very serious about bringing this to desktops," said Yair Landau, president of SPDE, the Sony division that's also developing the MovieFly Internet-based movie delivery service with four other Hollywood studios. "We're big believers in downloads."
SDPE is still determining the service launch date and final pricing structure, Landau said. The company is fine tuning the technology and ironing out rights issues with the various Hollywood unions.
But it's clear that Sony — a major producer of TV shows, movies, music and games — is very interested in distributing its content via Internet-protocol-based broadband delivery. If Sony launches the service, it would be the first company to use such technology to offer well-known content via subscription so soon after its initial run. (This summer, more than 50,000 Internet subscribers paid CBS $19.95 for 24-hour-a-day, seven-day-a week access to cameras used to film the reality show Big Brother.)
It's also clear that SPDE executives see the existing base of PCs — albeit only those with broadband connections — as a better platform than cable or satellite.
"It's like the often-quoted Qwest [Communications International Inc.] ad: Any movie ever made, anytime you want it," Landau said at one point during the Real conference. "There has to be some underlying basis of technology to get there.
"I don't think it's going to be cable because I don't think it's in their interest to offer that to you," he added. "They've built phenomenal monopolies that have made a lot of money by defining when you are going to watch, and where.
"The only way we're going to get mass ubiquity and personalization of movie delivery is through some open IP system. It's essential that we, as Hollywood, take the lead to start driving that because that's the only way it's going to get there."
At the same time, Sony is one of just two studios to sign a video-on-demand deal with cable pay-per-view provider In Demand. Universal Studios is the other.
Landau said Sony prefers downloading to streaming because downloads afford consumers functionality and flexibility. They can occur in the background and pose no buffering issues that affect the quality of the product, he said.
"We think people prefer the functionality to have that resident on their desktops," Landau said.
Average broadband speeds allow for one hour-long soap opera episode to be downloaded in 10 to 15 minutes, Landau said.
Sony will work with Real, using its technology and digital rights-management software to provide its subscribers with the programs each day, said Landau.
"It's pretty key for us to have an integrated player with a DRM system," Landau said. Although Sony's content is expected to work with Microsoft Corp.'s Windows Media Player, Landau said the studio would like to see a second provider in the digital rights management sector.
The subscription service will appear on Sony's SoapCity Web site (www.soapcity.com
), which has already signed on thousands of registered users, Landau said. Subscribers can either play the video on a desktop PC or burn a CD-ROM and watch the video on a DVD player, he said.
Landau expects the service's key markets to include college students — to whom a PC is as much of an entertainment device as a TV set — and office workers who are soap opera fans.
Users would be able to store a limited number of episodes on their hard drives at any one time, said Landau. With Real's DRM software, content providers can authorize material to be available for a timespan of their own choosing, such as one day or one week.
Sony's strategy stands in marked contrast to that of The Walt Disney Co., which developed its SoapNet cable channel to deliver primetime reruns of ABC's popular daytime soaps. After Disney completes its purchase of Fox Family Channel, it also plans to populate that outlet — to be renamed ABC Family — with repurposed content from the "Alphabet Network" and other Disney properties.
"We think this is a lot less expensive way to deliver content," said Landau of Sony's Internet strategy. "The broadband Internet is a lot more cost-effective."
Although many analysts don't think consumers will watch "TV" on their PC, Real Networks President Larry Jacobson said improvements in the quality of streaming video and its growing acceptance as a format will make that less of an issue.
"Passionate audiences will take the extra leap for the experience," he said.
The Napster Inc. music file-swapping service faced similar concerns, Landau noted.
"It didn't matter that the quality wasn't good enough," he said. "MP3 has become a de facto music standard."
The service could eventually migrate over to set-top boxes and the TV, Landau said. "If we have viable MPEG-4 [Moving Picture Expert Group] delivery to PCs, people will build receivers and focus on getting it to your TV set more effectively and efficiently," he said.
Sony is also grappling with the issue of commercials. The studio could place advertisers' messages before and after each episode or at some point inside the show, Landau said. That would affect the final price point.
For instance, if the service is priced at $29.95 per month, Landau said commercials "will be minimal." The soap operas also could be available on a per-program basis.
But it's not certain if consumers will pay for access to missed soap operas or movies via Internet download.
"Are people going to pay?" Landau asked rhetorically. "Yeah, we think so, but there's no massive evidence of this."