Friday, January 30, 2015

Sony flirts with music streaming biz, gets spurned

Though Sony can count itself among the top 10 media conglomerates in the world, the industrial titan found its flirtation with music streaming to be a short-lived dalliance as it was out-muscled by existing streaming services such as Spotify.

From the onset of its $10 a month music streaming service four years ago, Sony was already confronted my ominous omens. Vice president Michael Aragorn himself declared "that it is a brutal business and there's probably going to be some consolidation."

As early as March, Aragorn's prediction will come true as Music Unlimited succumbs to pressures from its competitors, including Deezer, Rhapsody, and Spotify. Though Sony boasted upwards of 100,000 subscribers and can claim to be the most popular streaming service in Japan, the company apparently encountered financial problems of undisclosed magnitude, which prompted executives to relinquish their hold on the music streaming market. Sony's record label, Sony Entertainment Music, is separate form their music streaming service and will remain intact.

Nearly all of the subscribers to Music Unlimited used the service through their PlayStation, which is another Sony-owned product.

In a partnership forged formed from the ashes of their fallen service, competitor-turned-cooperator Spotify will now provide all the music for PlayStation. The partnership will provide Spotify with access to PlayStation's 64 million users, which Sony executives claim have overlapping interests that encompass both companies.

"Spotify hasn't launched in Japan, however, despite negotiating for years with Japanese record labels which still rely heavily on CD sales for profit. The new music service that will provide the tunes for Japanese PlayStation users has yet to be determined," said Sony in a released statement.

I found the news intriguing for two principal reasons. First off, its a testament to how popular Music Streaming is, and that its no longer uncharted territory for companies. The fact that Sony, a colossal influence on the music industry, was unable to launch its service demonstrates just how entrenched and competitive the market is for streaming services is. It also casts into doubt the future of other major media conglomerates which are planning to launch streaming services of their own, such as Google's YouTube and SFX Entertainment.

Additionally, it demonstrates how important it is for media companies to understand their target audience and to try to tap into their collective identity. PlayStation player comprised the largest chunk of Music Unlimited's audience, so now Spotify and Sony must work together to distribute music that matches the gamers associated with PlayStation. A failure to do so may deal a massive blow to Spotify and even further losses for Sony.

Sony Bails Out of Music Streaming. (n.d.). Retrieved January 29, 2015, from

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