In the wake of the launch of Sony’s Q Music subscription service across Europe and the US, VG247 speaks to Sony Network Entertainment’s Shawn Layden about the PlayStation Network, the feasibility of “cloud” media and the company’s network strategy.
Qriocity Music Service
Launched in the US in June 2010 during E3 for Sony TVS.
Shortly expanded into Japan, China, and South Korea.
Hit Europe, UK and Ireland in March 2011 after November 2010 delay.
Aimed at the 70 million registers PSN users and branded as Music Unlimited.
Launched in the UK December 2010 on PSN.
Made available on PSN in North America and Europe in January 2011.
Shawn Layden, Chief Operating Officer of Sony Network Entertainment, a branch of Sony formed exactly a year ago today, is a man with a hell of a lot of experience in one of the biggest entertainment and electronics companies in the world. He joined Sony 14 years ago in 1997, and during that time he has worked within Sony Computer Entertainment in charge of international software development in London. Later, he became President of SCE Japan.
In his last year at SNE, he has turned his attentions to Sony’s cross-platform strategy, including its movie and music subscription services, as well as the PlayStation Store. Q Music is the division’s most recent launch, a new £4.99-a-month subscription service that gives access to more than 6 million songs across all the labels on the PS3, Sony home cinema systems and much else. The play, as Layden outlines, is to roll the service out across non-Sony platforms too, starting with Android later this year.
70 million registered PSN accounts and growing
The company was constituted out of a desire by Sony Group to have an entity that would oversee all the network activities across Sony. Those include, of course, the PSN, the Store transactional activities, video activities and now the music property, Q.
Three years in, Sony’s network business is the premier network entity within Sony group. There are 70 million accounts worldwide, and according to Layden, “it’s a massive undertaking.”
“Every Sony entity sort of cottoned on to the Internet at the same time, and knew they should be out there in some way – but they all vectored in different directions, took different angles and approaches,” he said.
“Essentially it became a bit of a cacophony for the user to have to establish a Bravia relationship over here and a Vaio one over there, so we decided to leverage the immense work that the Sony Computer Entertainment teams have done to create the PSN, build out from that and associate it with the other devices – Sony TVs, Blu-Ray players, laptops – and have Sony Network Entertainment be the central aggregator for all that activity.”
“PSN, three and a half years in, is the premier network entity within Sony group.”
The 70 million figure Layden handed out, is measured by the number of PSN account registrations, a number which was calculated as recent as the end of February 2011. While Sony knows how many of the 70 million accounts are active, it didn’t provide a number on that aspect.
“It’s a subset of the bigger number, obviously,” explained Layden. “But literally millions of people are transacting across the store on a regular basis. That number is much higher than what we’re getting right now with our network activities across televisions and Blu-Ray.
“I think the user demographic is a bit different [in the PlayStation market], as are their expectations. A PlayStation user expects the network, expects to do transactions or play on there. So we necessarily expect that of that whole network userbase, the PlayStation folks are more net-savvy.”
With Sony expecting to bring SNE to the Android platform this year, it expects the offering to remain part of its core business strategy by bringing the service to as many devices as possible – even ones not necessarily built by Sony. The reasoning behind this? Sony accepts the fact that customers have electronic devices which do not carry the Sony brand;however, there’s “no reason why this service shouldn’t be available,” on non-Sony gadgetry.
“If you’re measuring the core by where is the majority of the activity taking place, then of course it’s downloading PS games and add-on content,” said Layden. “That makes up the majority of the activity which SNE oversees. But the video service that we just keyed off in April – in the summer here in Europe – and the music stuff, which has been in the field for 6-8 weeks now, these are new and growing and nascent areas.
“I think the overall footprint of something like the music opportunity – because with one account you’ll be able to access music on your TV, music player, laptop, Blu-Ray, PS3 – the breadth of that offering is much wider than moves or games are. There’s a whole lot of growth potential here.”
To the Cloud
The idea of Cloud entertainment has been around for a while, but has always been limited by wireless technology, the need for a home server, and other entry barriers. Lately, the idea of Cloud-based services in homes has become more feasible, and Layden believes this significantly due to the spread and growth of broadband.
“I remember when I was here in London from 1999 to 2007 running the international software development in the studio, and we were doing online gaming with the PS2. It required a broadband connection to play SOCOM – but back then the term ‘broadband’ meant something different in Rome than in London or in San Francisco.
“I think a lot of those are starting to come up to a usable standard as far as speed throughput goes. That’s probably the biggest trigger to actually making this thing they call the Cloud – a term that makes something different to everyone – feasible. Really, bandwidth speed and availability is what’s making that viable now, more than anything else.”
With Sony labeling its PS3 console as more of an “entertainment hub” than a gaming console as of late, one might assume the less tech-savvy of consumer market wouldn’t understand the concept of a unified media platform. But with the youngest of this generation blissfully ignorant of a world where you couldn’t get online, have dynamic gaming experiences, or download videos, over time the market has filled with more “digital natives than actualised digital citizens.”
Naturally, this changes the attitude of the marketplace, and Sony thinks the general public is ready for it, especially with the release of the firm’s new streaming service – Q Music.
The Qriocity Music service
Normally, when a new service is rolled out by an entertainment company, it starts small with availability in one area, before expanding to other markets. It is not unusual for a company to test the waters in this manner; however, Sony chose a different route with it’s Q Music service.
“With the Q Music service we’ve gone line in 10 countries now in a matter of 10 weeks.”
The £4.99 a month subscription service runs “hot and cold, 24/7,” across Bravia, Bluray, Vaio, PS3 and home cinema systems from Sony – and it will expand from there.
“With the Q Music service we’ve gone line in 10 countries now in a matter of 10 weeks, which is probably the fastest rollout for any music service ever,” said Layden.
“Usually you start your service and get to a certain size in one market, then go to the next market and try to replicate that. But we’re live in the UK, Ireland, France, Germany, Italy, Spain, Australia, NZ and the US all at once.”
With the service’s launch, Sony has put itself in the same market as other streaming music offerings such as Spotify in the UK and its US equivalent, Pandora. Almost every available music application of this kind were born out of the PC and laptop era and many can now be used on consoles, handhelds, and various smartphones.
While Sony sees these services as a competitor, and plans to offer Q Music on more devices than just PS3, it is more concerned with “putting music back in the living room,” by making it a communal sound experience with access to more than 6 million songs. The earbud-free experience allows users to sit on the sofa “in a big room with everybody.”
Music labels hop on board
Working with music labels has never been an easy task – for anyone. To get an idea of how many hurdles one would need to jump, all on has to do is read up on the trials and tribulations game publishers experienced when working with these companies on titles such as Guitar Hero and Rock Band.
The big boys of the music service marketplace such as iTunes, Rhapsody, and Microsoft’s Zune have also had run-ins with music labels, and even streaming services such as Last FM and Pandora have had moments of grief when dealing with these corporations.
Sony’s experience was no different, Layden admitted, and it took the firm quite a while to negotiate with the various firms out there. Luckily for Sony, though, it’s one of the big four record companies in the business, and its history goes all the way back to 1929 when the American Record Corporation was formed. ARC was purchased by Columbia/CBS Records in 1938 and in 1991 it was in turn purchased by Sony, thus forming Sony Music.
Such a resume obviously helped the firm with negotiations, and considering Doug Morris, who headed Warner Music when it was Universal Music, will take over as CEO of Sony Music Entertainment on July 1 this year, that probably didn’t hurt matters when it came to signing contracts.
“We spent the last 12 months working with Universal, Warner, EMI, Sony Music of course and hundreds of independents,” he said. “On the flipside there are all the different publishing companies and collection agencies – there was a whole load of contractual paperwork in getting something like this off the ground. But they are all on board, and they are all really supportive about it.
“I think the music labels like the idea of working with Sony on this because Sony’s in the music business, and has been for a very long time. A lot of the other music services you could mention are people with technology and a business model who are trying to leverage someone else’s content. I think, when we have conversations with the labels about how we can best promote things, it’s two companies who understand the music business having that conversation.”
Getting Q into people’s heads
From a marketing perspective, Sony has started aggressively courting consumers at a grassroots level with its inaugural consumer experiential events. There’s one in in Camden this week, as well as events in Los Angeles this weekend.
“We have large campaigns already starting across the digital media spaces like VIVO and Youtube,” said Layden. “This is not the kind of business that you would buy prime-time TV advertising for – we really just want to take a measured yet regular approach to the promotion.”
“People don’t buy an electronics device because they like having black plastic under their TV set in the living room.”
Layden contributes the grown of Sony’s business in the last five or six years to chairman Howard Stringer, who comes from a media background, and has always been a strong proponent of “tightening and enhancing the content offerings.”
“People don’t buy an electronics device because they like having black plastic under their TV set in the living room,” said Layden. “They buy it to get to something. What they want to get to is content.
“The PlayStation business has grown tremendously, not only in the market but in the kind of games that the teams are creating, first-party and with third-party partners. It’s the same with music and movies. These are the most dynamic areas of the Sony group over that timeframe.”
Layden believes this growth will continue, especially in networking, which he hopes will be forefront five years from now.
“Absolutely this is the next stage,” he said. “It, too, concentrates on the content – people want this network connection so that they can get to the thing they want, and we want to be able to close that gap between want and have – that’s what marketing’s all about. The network does that faster than taking a trip down to Curry’s or ordering from Amazon.
“We want to be at the forefront of that.”