Sony Puts xBox Streaming Service on Pause

Just in time for the holiday season, Sony plays The Grinch.  (How’s that for mixed metaphors!)

Netflix has teamed with LG, Microsoft, Roko, Samsung and TiVo to stream movies from its 100,000 title library. Today was supposed to be the launch of the Microsoft/xBox service … until Sony put that service on hold. 

The Motley Fool thought it was an anti-competitive, since Sony owns Playstation 3 in addition to being the number one box-office king (it owns Columbia Pictures) in America. cNet says its a licensing problem. According to Sony’s statement:

This issue is not specific to Xbox or any other individual platform… Sony Pictures is currently in discussions with the relevant parties to resolve certain licensing matters related to the distribution of its motion pictures. Given the ongoing nature of these discussions, we don’t think it is appropriate to comment further at this time.

Only about 11 percent of the Netflix library is available to stream. The demand for this service, of course, is not only a function of supply. It is also constrained by bandwidth.

CNBC noted that Microsoft bet against Sony in the HD DVD wars.

Sony’s decision to turn its back on Netflix’s arrangement might be frustrating for Xbox users, but who can blame Sony? Why in the world would the company give a competitive leg up to an arch rival for the sake of a few extra royalty dollars? It might seem like Sony’s playing games here, but there’s nothing fun-and-games about its battle with Microsoft for gaming dominance…

The question for investors though is whether Sony is cutting off its nose [to spite] its face. Royalty dollars from video streaming might seem paltry today, but the funny thing about technology: it has the tendency to grow explosively.

Only time will tell if Sony’s finger is on “pause” or “eject.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s