AOL Time Warner Inc. and Sony Corp. announced a sweeping Internet technology, content and consumer electronics collaboration last week that initially will focus on home networking, Internet browsing and Internet-access service.
"We have specific projects that are staffed," AOL Time Warner chief technology officer William Raduchel said, speaking about the three initiatives.
The home networking gateway project is perhaps the most interesting and the one that could draw the most interest from cable operators. The goal is to offer consumers the ability to access and transfer online entertainment from TVs and PCs to various others devices, such as secondary PCs, personal digital assistants, mobile phones and camcorders, as well as share content within the home over secure, copy-protected networks.
Raduchel said options could range from retail models to service providers, such as Time Warner Cable, getting involved in home networking installation and maintenance. Over time, the price of the technology could drop to the point where home network equipment would be packaged with other products at little or no cost. "There will be different companies and different business models," he said.
He also stressed that all of these initiatives will produce constantly evolving solutions, similar to sequential releases of software. "This is not a problem that gets solved once and forever," Raduchel said.
The two companies said they would work on a new Internet browser that provides optimal performance and a consistent experience across various consumer electronics devices. And AOL said it planned to offer access services to Sony's networked consumer devices beyond computers.
The announcement was timed for Comdex, the major PC industry trade show, so technology dominated the discussion. But Raduchel agreed that AOL's and Sony's vast media and content holdings will play a big part of the equation. Both companies are part of MovieFly — a consortium of Hollywood studios that plan to deliver movies over the Internet next year — and both operate separate paid, online music services. One missing piece to those two strategies is a home networking solution that would allow consumers to download music and movies and transfer the content to MP3 players, CD players and TV sets.
Raduchel said AOL and Sony expect to have products on the market perhaps by next year.
The two companies have already inked a deal that brings AOL's instant messaging to Sony's PlayStation 2 gaming device. Work on an Internet browser for PlayStation2 also is underway.
Sony already has a foothold in the set-top space with Cablevision Systems Corp. The Sony set-top includes a modem, and 1394 and universal serial bus connectors, said Wilt Hildenbrand, Cablevision's executive vice president of technology and engineering. "I like where we lie right now," he said, when asked about the AOL-Sony deal during a third-quarter earnings conference call last week.
Separately, Sony announced a software development deal with Nokia Corp. for the mobile market. The company also said that Cable & Wireless's Digital Island division will handle streaming services for Sony Music Entertainment's promotional Web sites.