Sony to make its move into online television

Japanese electronics firm weighs up risky plan to take on cable and satellite giants in the US
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The Independent Online

Sony is working on a daring plan to shake up the way Americans watch television, with a service that will pipe TV channels direct to the company's PlayStation consoles, BluRay video players and television sets.

The Japanese electronics giant believes it may be one of the companies powerful enough to dislodge cable TV providers and satellite broadcasters from their entrenched position in American homes, and it is in negotiations to assemble content for a new internet TV service for people who buy its devices.

There are already more than 18 million homes in the US with an internet-enabled PlayStation 3, and Sony's new mid and high-end televisions all come with an internet connection. The company already offers movie rentals through its devices, but now wants to add whole TV channels.

In recent weeks it understood to have approached several of the major US broadcasters, including NBC Universal, Discovery Communications and Rupert Murdoch's News Corporation, which owns the Fox network. Although Sony has its own movie studio and television production company, it does not own television channels.

As an electronics manufacturer, it has one clear advantage over entrenched cable and satellite broadcasters, says Richard Broughton, the head of broadband media at the research firm Screen Digest. "Cable companies have to be careful about not annoying their existing customers, whereas device manufacturers can put new ser- vices on new devices and test things in the market in a way that a cable or satellite company cannot."

Nonetheless, Sony faces formidable challenges in assembling a suite of TV channels that consumers would be willing to pay for, Mr Broughton said, and persuading them to dump their cable or satellite provider altogether may be an ambition too far.

"The technology is now, and you can reliably deliver TV by the internet to most consumers in most markets at high quality, so that is a lesser challenge than the content rights negotiations."

The television industry is in a period of experimentation, not just in the US but in all major markets, as the possibility has emerged of delivering TV channels, pay-per-view services and video streaming over the internet grows.

New services have sprung up, such as Hulu in the US, which is co-owned by several of the major TV networks, allowing people to watch old episodes of TV shows on demand on their computers.

Cable companies in the US and BSkyB in the UK are rolling out services that allow subscribers to watch channels not just on the TV but on tablet computers.

And looming over the market is the possible entry of Apple, where founder Steve Jobs was working on a television offering before he died last month.

"I'd like to create an integrated television set that is completely easy to use," he told the biographer Walter Isaacson. "It will have the simplest user interface you could imagine. I finally cracked it."