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Sony plans to begin testing its new subscription cloud TV service PlayStation Vue in New York City later this month.
After that initial test of the service, which is delivered via the Net to PlayStation 4 and PS3 game systems, Sony expects to launch the service in four cities – New York, Philadelphia, Chicago and L.A. – during the first three months of 2015. More cities will go online after that, says Sony Computer Entertainment president and group CEO Andrew House.
PlayStation Vue blends live local broadcast and cable TV network programming with on-demand content and programs that viewers have saved in a cloud-based DVR. Six major content partners are on board: CBS, Discovery Communications, Fox, NBCUniversal, Scripps Networks Interactive and Viacom.
That adds up to about 75 channels including Comedy Central, Animal Planet, Food Network, Syfy and Nickelodeon. Sony continues talking to other major providers with the biggest holdout being Disney, parent company to ABC and ESPN. "It's a pretty robust lineup, by no means do I think we are done," House said.
A "competitive" subscription fee will be announced at a later date, he says. Subscribers will not be charged any setup fee – your game system, TV and broadband connection are all you need – and will not have to agree to a certain length of contract.
With its current content partners, PlayStation Vue could be an alternative for viewers who complain about paying for ESPN when they don't like sports, says Todd Juenger, senior research analyst with investment firm Sanford C. Bernstein. Some sports are included on broadcast networks and on Fox regional sports networks. And there's reality in the mix with network series such as Survivor, The Blacklist, Sons of Anarchy and The Daily Show with Jon Stewart.
Still, Sony's target market of PlayStation gamers, which skews young adult male, are core ESPN viewers, Juenger says. "Not having ESPN would probably disqualify a big percentage of their target audience," he says.
But Sony can hit three to five million subscribers to be "impactful," says BTIG research analyst Rich Greenfield. "It had a good amount of content. I think the bundles have gotten so large that there's plenty of room to shave out."
When the actual service launches, consumers will be able to activate it by downloading an app on the PlayStation 4 or PS3 for a free trial. An iPad app is planned soon after the service launches, too.
An image of a menu within Sony's upcoming PlayStation Vue cloud TV service.(Photo: Sony PlayStation)
Programming can be found in multiple ways via PlayStation Vue's interactive menu. Personalization of the service is key to its success, House says. Once you start using the service, it will open up with a timeline of options related to what you last watched.
You can favorite up to 500 series; then the Favorites option will let you know whether there are any upcoming episodes, as well those you missed that you can go back and catch up on. That's possible because for any show you favorite, all episodes will be saved in your cloud-based DVR.
Live TV recommendations will be shown based on what the PlayStation audience is watching; programs will be recommended based on your previous viewing selections, too. You can also use a more traditional program guide that puts your favorite channels first before listing the rest alphabetically.
"The ability to move seamlessly between brands and the menu of live content and on demand in a very brand-friendly way was incredibly appealing to us," said Rebecca Glashow, senior vice president, digital distribution & partnerships for Discovery Communications, which has Animal Planet, The Learning Channel and Discovery Channel among its Vue offerings.
Sony's interface will likely drive viewers to watch more of the programs they already watch, said Philippe Dauman, president and CEO of Viacom. In addition to Comedy Central, Viacom's channels on the service will include MTV, MTV 2, Nick Jr. and Spike. "Sony's platform creates an immersive, customized viewing experience for our audiences – empowering them to explore and discover more of the programming across our brands," he said.
Invitees to the initial New York trial will be sent to a subset of current subscribers to Sony's premium PlayStation Plus service ($49.99 annually), which gives members free games, discounts and online multiplayer access.
Sony is entering into an increasingly crowded online video market that has begun to chip away at the traditional pay-TV stranglehold on homes. HBO and Showtime plan new standalone services and CBS recently launched two new online ventures, CBS All Access, a $5.99-monthly service, and an ad-supported CBSN news service.
Dish Network and Verizon are also expected to debut Net TV services soon. "It's a space that is ripe for innovation," Sony's House said. "There is an additional motivation for us in that this is a large step forward to getting the PlayStation from a dedicated powerful games device to being much more of a core entertainment hub."
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