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Sony Reveals Its Virtual MVPD

Marking the dawn of the “virtual” multichannel video programing distributor era, Sony last week introduced PlayStation Vue, a cloud-driven pay TV service that will start off with a lineup of about 75 channels.

Sony has salted away distribution deals with several top programmers, including NBCUniversal, CBS, Fox Networks, Viacom, Discovery Communications and Scripps Networks Interactive. But if it’s going after a full-freight TV play, it has some significant gaps to fill. Not yet on that list are ABC, ESPN, Time Warner Inc., Turner Broadcasting System, A+E Networks and AMC Networks.

But Sony still has some time to get those deals done.

Sony’s initial invite-only beta preview gets underway later this month in New York, offering access on Play- Station 4 and PlayStation 3 consoles. The company said it will extend access to more Sony-made devices, as well as some non-Sony devices, including the iPad, later on.

Sony will launch PlayStation Vue on a commercial basis in the first quarter of 2015 and has already identified three other launch markets: Chicago, Philadelphia and Los Angeles.

The service will feature catchup and video-on-demand services, a recommendation engine and a cloud DVR “without storage restrictions or scheduling conflicts” — with the caveat that customers must view those recordings within 28 days.

Sony’s strategy seems to diverge a bit from the OTT project underway at Dish Network, which is expected to feature a skinnier lineup that will cost about $30 per month. Dish has announced OTT distribution rights with The Walt Disney Co., A+E Networks and Scripps.

Sony has not revealed pricing and packaging for PlayStation Vue, other than to say it would be “fair and competitive” with “no hidden fees or charges.” Another plus: no equipment rentals or truck rolls.

In a research note, Todd Juenger, an analyst with Bernstein Research, estimated that Sony’s offering will fetch “$35 or so,” based on the networks currently on board. Factoring in a 20% premium, he said he sees Sony’s affiliate fee running at about $28. That could rise to $45 to $50 per month if Sony adds more key programmers to the mix.