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May 31, 2006 1:20 PM PDT

How Sony failed to Connect, again

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Early in 2005, more than a dozen Sony employees from the company's consumer electronics divisions gathered for an unusual meeting in the tiny Palo Alto, Calif., headquarters of digital media start-up Kinoma.

Kinoma Chief Executive Peter Hoddie, an Apple Computer alumnus, had been put in charge of high-profile Sony software development, including the Connect digital music project. For a company historically averse to using outside technology, this was a significant step.

For more than two hours, the group met in the futon-lined public area of Kinoma's offices. According to attendees, Hoddie gave a sales pitch, but not much more. When asked for details on the technology they'd be using for Connect, Hoddie declined to provide them, and the meeting turned contentious before breaking up, employees said.

Programmers went to work on the project, intended to be Sony's answer to Apple's iTunes. But the tone had been set for a dysfunctional mix of politics, programming and pique that would prove deeply destructive to Sony's digital music ambitions. Fourteen months later, a disastrous product launch doomed Sony's latest attempt to catch Apple.

"There were a lot of problems with Connect, but there were some things that could have gone right," said one Sony employee familiar with the project's history, who like most of the insiders interviewed for this story, asked to remain anonymous. "The software was on a trajectory to be OK. But that got wiped out."

The effects continue to resonate inside Sony. On Tuesday, CEO Howard Stringer informed the company that Phil Wiser, a Connect champion inside Sony and chief technology officer for Sony Corp. of America, would be leaving effective Friday, sources close to the company said.

Wiser is leaving to join a Silicon Valley-based digital home entertainment firm called Building B, according to a source familiar with his plans. The Connect division is being taken over by Steve Bernstein, a Sony senior vice president who previously oversaw the company's Media Software group.

A Sony representative declined to comment for this story, or to provide Sony executives to discuss the company's music business. Hoddie also declined comment.

The effort to reel in iTunes opened the door to Sony's ultimately unsuccessful flirtation with another company's technology--a relationship that's continued in Kinoma's oversight of Sony's highly touted eBook project.

Why did the electronics giant turn so uncharacteristically to an outsider for technology so critical to its future?

Past and present insiders at Sony say Apple's meteoric rise in music has left top Sony executives with both respect and envy for Apple's products, even while they resist becoming dependent on Microsoft's digital music technology.

Kinoma and Hoddie appealed to their envy of Apple and their aversion to Microsoft.

From QuickTime's creation to Sony's secret weapon
Hoddie is far from a household name. But he's well known in digital media circles.

Before striking out on his own, Hoddie spent 10 years at Apple, serving as team leader and chief architect of the company's early QuickTime multimedia software project. People who worked at Apple during that time say much of the early code was Hoddie's, and in the days before it was ported to the Windows platform in 1994, he was one of the only people at Apple to have a full picture of the software's code base.

"He was an absolutely brilliant individual, and one of the great treasures of Apple," said Jonathan Hirshon, a technology marketing consultant who served as a technology evangelist on Apple's QuickTime team.

See more CNET content tagged:
Kinoma Inc., Sony Corp., Apple Computer, digital media, digital music

Add a Comment (Log in or register) 118 comments (Showing first 20 comments)
Sony should buy TiVo
by datacowboy May 31, 2006 1:54 PM PDT
...and do for video what Apple did for music. The metrics and models between music and video do not completely match, but video content needs to evolve like music content has.

Apple's foray into video is limited because they are not owners of the content. They are limited to brokering deals. Sony owns content and could start distributing it however they please and foster consumer demand. This applies to VoD, rental, and broadcast with consumer acceptable digital rights. Others would fall in line.

Add to this transfer capabilities to PSP, possible TiVo software on the PS3, and you have a real competitive offering.
Reply to this comment View reply
Sony should buy TiVo
by datacowboy May 31, 2006 1:54 PM PDT
...and do for video what Apple did for music. The metrics and models between music and video do not completely match, but video content needs to evolve like music content has.

Apple's foray into video is limited because they are not owners of the content. They are limited to brokering deals. Sony owns content and could start distributing it however they please and foster consumer demand. This applies to VoD, rental, and broadcast with consumer acceptable digital rights. Others would fall in line.

Add to this transfer capabilities to PSP, possible TiVo software on the PS3, and you have a real competitive offering.
Reply to this comment View reply
How to CRUSH the competitors
by Rickardo May 31, 2006 2:22 PM PDT
The first company to drop DRM across its entire catalog and open up a music store for their stuff and sell direct cutting out all the contenders (iTunes, Napster, whomever) is going to dropkick the sales charts out the window. EVERY other company will closely envelope themselves in their protective DRM and watch their sales drop. And whoever the biggie is who had no fear will start to totally kill the competition. Granted if it's Sony they'll have to be happy with just doubling or tripling their music sales and slide by with whatever MP3 (not AAC, not WMV) player they can cobble together. Artists at all the other labels will abandon ship the instant their contracts expire. Next the label should ENCOURAGE P2P of all that downloaded music. The totally sneaky idea is to build a rep as the corporate behemoth who loves (not hates and despises) their customers. Those customers would be drawn under the spell like rats before a cobra. They'd have no choice but to buy, and buy and buy. Even buy stuff they would never have thought to buy before because they happened across some interesting stuff via P2P.

Imagine, music fans LOVE their artists and also LOVE the publisher. Now that is science fiction if I ever heard it. Hey, maybe Pixar could make a movie. Have to be animation though cause no one living would dare appear in it for fear of ...

Rant off.
Reply to this comment
How to CRUSH the competitors
by Rickardo May 31, 2006 2:22 PM PDT
The first company to drop DRM across its entire catalog and open up a music store for their stuff and sell direct cutting out all the contenders (iTunes, Napster, whomever) is going to dropkick the sales charts out the window. EVERY other company will closely envelope themselves in their protective DRM and watch their sales drop. And whoever the biggie is who had no fear will start to totally kill the competition. Granted if it's Sony they'll have to be happy with just doubling or tripling their music sales and slide by with whatever MP3 (not AAC, not WMV) player they can cobble together. Artists at all the other labels will abandon ship the instant their contracts expire. Next the label should ENCOURAGE P2P of all that downloaded music. The totally sneaky idea is to build a rep as the corporate behemoth who loves (not hates and despises) their customers. Those customers would be drawn under the spell like rats before a cobra. They'd have no choice but to buy, and buy and buy. Even buy stuff they would never have thought to buy before because they happened across some interesting stuff via P2P.

Imagine, music fans LOVE their artists and also LOVE the publisher. Now that is science fiction if I ever heard it. Hey, maybe Pixar could make a movie. Have to be animation though cause no one living would dare appear in it for fear of ...

Rant off.
Reply to this comment
Since when was Sony a fan of non-proprietary stuff?
by sigma8 May 31, 2006 2:25 PM PDT
I wonder if the implication that Sony didn't like the fact that
Kinoma's stuff was proprietary was Sony's complaint? Or a
complaint projected by the author of this article?

Sony doesn't seem to be a strong fan of open standards like
XML. Nearly every device it makes uses some proprietary
technology. Atrac, AVC, UMD discs, minidiscs.
Reply to this comment View reply
Since when was Sony a fan of non-proprietary stuff?
by sigma8 May 31, 2006 2:25 PM PDT
I wonder if the implication that Sony didn't like the fact that
Kinoma's stuff was proprietary was Sony's complaint? Or a
complaint projected by the author of this article?

Sony doesn't seem to be a strong fan of open standards like
XML. Nearly every device it makes uses some proprietary
technology. Atrac, AVC, UMD discs, minidiscs.
Reply to this comment View reply
Clearer Now
by Yet Another Mark Johnson May 31, 2006 2:29 PM PDT
I'm been wondering for MANY months now just why it is taking so unbelieveably long to get the new ebook reader to market. It's hardly some radical new technology, the display (eInk) is very cool, but the underlying tech of the device is far more "off the shelf" than "cutting edge." It's like taking the guts of a PDA and slapping a new (vastly improved and lower power) lcd into it. How hard is that?

Obviously the "how are we going to make an iTunes for books" problem is (as this article helpfully describes) the real crux of the issue. And also obviously Sony can't seem to find the answer to that question.

The funny thing is that I (and I suspect a huge portion of the potential ebook market) couldn't care less when/if they get their iTunesForBooks equivalent done. I want to buy the reader right now simply to display my own reference content on. I have basically no interest in buying a DRM "a la carte" copy of a Grisham novel, etc. anyway.

So the irony is that potential customers like me can't buy the hardware because the store isn't ready yet.

Hopefully Apple will come into this and just take the whole market overnight. They really should. If Apple licensed the eInk screen, made a reader and then added a books section to Itunes, they'd own the game instantly. I find it strange that they haven't wanted to get into this.
Reply to this comment
Clearer Now
by Yet Another Mark Johnson May 31, 2006 2:29 PM PDT
I'm been wondering for MANY months now just why it is taking so unbelieveably long to get the new ebook reader to market. It's hardly some radical new technology, the display (eInk) is very cool, but the underlying tech of the device is far more "off the shelf" than "cutting edge." It's like taking the guts of a PDA and slapping a new (vastly improved and lower power) lcd into it. How hard is that?

Obviously the "how are we going to make an iTunes for books" problem is (as this article helpfully describes) the real crux of the issue. And also obviously Sony can't seem to find the answer to that question.

The funny thing is that I (and I suspect a huge portion of the potential ebook market) couldn't care less when/if they get their iTunesForBooks equivalent done. I want to buy the reader right now simply to display my own reference content on. I have basically no interest in buying a DRM "a la carte" copy of a Grisham novel, etc. anyway.

So the irony is that potential customers like me can't buy the hardware because the store isn't ready yet.

Hopefully Apple will come into this and just take the whole market overnight. They really should. If Apple licensed the eInk screen, made a reader and then added a books section to Itunes, they'd own the game instantly. I find it strange that they haven't wanted to get into this.
Reply to this comment
How Sony failed to Connect, again
by Stan Johnson May 31, 2006 3:24 PM PDT
I'm just happy they failed. I hope more failure is to come for Sony.
Reply to this comment View all 4 replies
How Sony failed to Connect, again
by Stan Johnson May 31, 2006 3:24 PM PDT
I'm just happy they failed. I hope more failure is to come for Sony.
Reply to this comment View all 4 replies
Good
by GrandpaN1947 May 31, 2006 3:35 PM PDT
Good. Sony reaps what Sony shovels.
Reply to this comment
Good
by GrandpaN1947 May 31, 2006 3:35 PM PDT
Good. Sony reaps what Sony shovels.
Reply to this comment
Merge with Apple
by irisfailsafe May 31, 2006 3:48 PM PDT
has Sony ever thought of merging with Apple making Stevo the
headmaster...
Ditch VAIO's and walkmans, maker their TV's, DVD's run Mac OS
X... Let them be designed by Jonathan Ive and his team...
Reply to this comment View all 3 replies
Merge with Apple
by irisfailsafe May 31, 2006 3:48 PM PDT
has Sony ever thought of merging with Apple making Stevo the
headmaster...
Ditch VAIO's and walkmans, maker their TV's, DVD's run Mac OS
X... Let them be designed by Jonathan Ive and his team...
Reply to this comment View all 3 replies
Moving forward with FSK is the wrong solution
by Cyril Demaria May 31, 2006 4:04 PM PDT
Being an owner of a Sony MP3 player I must say that... the hardware is great and the software is totally deficient. Connect is slow, clumsy and the systematic transformation of MP3 in ATRAC just adds more trouble to any synchronisation (which is awfully slow).

But I do not applaud iTunes and iPod. I believe that the DRM battle between Sony, Microsoft, Apple and a few others to set up a proprietary standard is wrong for the market. Open standards should be the norm, or at least stick with actual standards (MP3, MPEG).

Sony wants to stick with FSK? Then no wonder if they go again into the wall.

It is time to revise a misconception: the classical sales model for content is past. The success of Apple is not from iTunes but the fact that you can play MP3 tunes on your iPod.

iTunes is marketing. The big money comes from hardware at Apple - ask Samsung which has lost the compression chip manufacturing contract.

Sony has to innovate by:
> selling its music business
> champion open standards
> design and manufacture good hardware

In a word: PSX, Mobile phones (SonyEricsson), MP3 players and possibly laptops.

As a related story, I suggest to read my post about Quaero to be published on the www.360journal.com which examines a related issue - searching multimedia contents in a DRM world.
Reply to this comment
Moving forward with FSK is the wrong solution
by Cyril Demaria May 31, 2006 4:04 PM PDT
Being an owner of a Sony MP3 player I must say that... the hardware is great and the software is totally deficient. Connect is slow, clumsy and the systematic transformation of MP3 in ATRAC just adds more trouble to any synchronisation (which is awfully slow).

But I do not applaud iTunes and iPod. I believe that the DRM battle between Sony, Microsoft, Apple and a few others to set up a proprietary standard is wrong for the market. Open standards should be the norm, or at least stick with actual standards (MP3, MPEG).

Sony wants to stick with FSK? Then no wonder if they go again into the wall.

It is time to revise a misconception: the classical sales model for content is past. The success of Apple is not from iTunes but the fact that you can play MP3 tunes on your iPod.

iTunes is marketing. The big money comes from hardware at Apple - ask Samsung which has lost the compression chip manufacturing contract.

Sony has to innovate by:
> selling its music business
> champion open standards
> design and manufacture good hardware

In a word: PSX, Mobile phones (SonyEricsson), MP3 players and possibly laptops.

As a related story, I suggest to read my post about Quaero to be published on the www.360journal.com which examines a related issue - searching multimedia contents in a DRM world.
Reply to this comment
Peter Hoddie
by CBSTV May 31, 2006 4:28 PM PDT
In view of Sony's continuing problems in the digital music business,
I'd say that Peter Hoddie is still working for Apple!
Reply to this comment
Peter Hoddie
by CBSTV May 31, 2006 4:28 PM PDT
In view of Sony's continuing problems in the digital music business,
I'd say that Peter Hoddie is still working for Apple!
Reply to this comment
Too Many Products.
by Dead Soulman May 31, 2006 5:30 PM PDT
The problem/challenge with Sony is that the products they offer to the U.S. market is different from the one they have in Japan. This "dual-production" method will, and it has, kill any company's chance to compete and stay on top. Sony is dying from this crazy, and unexplicable production practice.

All MP3 manufacturers are dying to kill Apple's domination of the market. But, they keep releasing product after product without any proper planning. Sure Apple spends a fortune on marketing. But, they only have a limited number of products "iPod, iPod Shuffle (which it seems to be on they way out, and iPod Nano. That's it. These products evolve and are phased out or replaced with better products as the technology progresses. That's it. No, "20 or 25 different products released annually."

Simple. Produce a limited amount of items, support and develop them. Connect could have a chance as long as they orchestrate their strategy smartly.

But, if Sony continues this failing strategy, they don't stand a chance.
Reply to this comment
Too Many Products.
by Dead Soulman May 31, 2006 5:30 PM PDT
The problem/challenge with Sony is that the products they offer to the U.S. market is different from the one they have in Japan. This "dual-production" method will, and it has, kill any company's chance to compete and stay on top. Sony is dying from this crazy, and unexplicable production practice.

All MP3 manufacturers are dying to kill Apple's domination of the market. But, they keep releasing product after product without any proper planning. Sure Apple spends a fortune on marketing. But, they only have a limited number of products "iPod, iPod Shuffle (which it seems to be on they way out, and iPod Nano. That's it. These products evolve and are phased out or replaced with better products as the technology progresses. That's it. No, "20 or 25 different products released annually."

Simple. Produce a limited amount of items, support and develop them. Connect could have a chance as long as they orchestrate their strategy smartly.

But, if Sony continues this failing strategy, they don't stand a chance.
Reply to this comment
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