Sony Music Challenged by Digital Ubiquity?

Sony and Philips are both developing music storage formats that will allow storage of between 30 and 100 hours of music onto a CD. Unsurprisingly there has been uproar from various sectors of the music industry, viewing this as a perfect tool for storing illegal copies of music files and CDs.

The interesting dilemma that this raises is the relationship between Sony Music and Sony Electronics. It was once argued that Sony merely acquired their record division in order to provide the ‘software’ for many of their devices. This development certainly gives some weight to that argument, i.e. that it doesn’t matter if the content is acquired through legitimate purchase of a CD or through illegal download as long as there is content available for the product. Indeed, freely available vast catalogue is preferable in this context as it drives the demand for heavier usage of large storage capacity formats far more than a monthly purchase of one 12 track CD album.

Both Sony Music and Sony Electronics always emphasise their independence, but the simple fact is that Sony Electronics cannot expect to have a profitable music division if the impact of piracy (both online and offline) is allowed to continue unabated, let alone with tacit support from their own products.

Do Sony Electronics even care? Well I am sure they do to some extent, but the business case for Sony Music as provider of software for Sony Electronics products is perhaps less string than it was 10 or 15 years ago. The CD boom has subsided from a label perspective but successfully created a global market for CD players. Home entertainment technology is evolving in a far more multifunctional direction. Readers of Michael Gartenberg’s blog will be very familiar with digital ubiquity and the same principle certainly applies for music entertainment: devices and formats are becoming more focused on multiple layers of connectivity and interactivity. DVD and computer game sales are challenging the hegemony of CD sales in music retailers and home entertainment systems allow the user to interact with a far wider range of entertainment than a music CD.

This is not say that Sony Music does not have a role in the Sony picture, simply that it’s importance has lessened as music has become less central to home entertainment.

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