Sony Latest to Target Over-the-Top TV

LAS VEGAS — Confirming rumors that stretch back to last year, Sony said at the International CES here that it plans this year to test an over-the-top pay TV service in the U.S. that will include live TV, video-on-demand content and a digital video recorder function.

Sony CEO Kazuo Hirai tipped the plan during the company’s keynote last Tuesday (Jan. 7), but offered no further detail during the event other than to note that Sony has about 70 million Internet-connected devices in U.S. homes and about 25 million domestic PlayStation 3 users. As of Dec. 28, Sony had shipped 4.2 million PlayStation 4 consoles worldwide.

In a follow-up interview with journalists, Hirai reportedly downplayed the idea that Sony was getting ready to go head-to-head with traditional multichannelvideo programming distributors.

“We’re not trying to compete with cable operators,” he said early on, then later hedged a bit. “If we’re talking about live television, then it might be competitive.”

Sony has not announced any distribution deals for the budding service, but last August reports surfaced that the company had reached a preliminary deal to carry networks from Viacom, which owns several channels, including MTV, Comedy Central and Nickelodeon.

Sony execs on the show floor declined to expand on the company’s pay TV plans, but some recent technical work completed for Video Unlimited — its transactional, digital sales and rental service linked to Sony Internet-connected devices, including PlayStation — hints at how Sony might distribute such a service.

Anu Kirk, director of music service for Sony Network Entertainment, said Sony recently recoded all of the video assets for Video Unlimited, which currently holds about 250,000 movies and TV shows, into the MPEG-Dash adaptive-bit-rate streaming format.

That will enable the bit rate and resolution of the video to fluctuate depending on the available bandwidth. Sony said the addition has resulted in faster load times.

The question now is whether Sony’s OTT play will indeed be launched and find success in a saturated pay TV market.

Intel Media has all but thrown in the towel with respect to OnCue, its proposed video service in the making. The chipmaker is rumored to be shopping those assets to Verizon Communications.

Speculation as to why Intel Media pulled back has varied. Some sources indicated the company had trouble landing enough carriage deals and the rights to cobble together a compelling service.

But two sources at CES said Intel Media put all of its distribution deals in place, and then refused to sign them over fears that subscriber milestones and other commitments required by those contracts were too steep for Intel to stomach.

Intel CEO Brian Krzanich recently acknowledged, in an interview with technology website Re/code, that the company lacked the scale to move ahead on a pay TV service on its own. “When you go and play with the content guys, it’s all about volume. And we come at it with no background, no experience, no volume.”

Broadcasting & Cable contributing editor George Winslow contributed to this report.