Sony Corporation has just filed a record loss of $6.4 billion. How does anyone lose that much money? Particularly, how does one of the biggest makers of electronics, movies and music lose that much money? Maybe it’s piracy. After all when they lobby governments for new media-control legislation, record companies talk as if every download is a loss of a sale. Perhaps they’re actually putting that on their balance sheet now.
OK, the real reasons are probably more complicated. Sony is a complicated company. (Did you know it has a financial services arm?) But I think this in itself causes much of their problems. Making the content and the equipment to play it on is a strategy born of the format wars. Sony’s technically superior Betamax design lost out to VHS, in part because its rivals had better deals for film distribution. So when it came to the the battle between Blu-Ray and HD DVD, Sony was better prepared; it now owns about one sixth of Hollywood.
But format is now irrelevant, an anachronism. Sony won a war over a wasteland.
The makers of audio and video equipment are, to put it crudely, on our side. They know we don’t want the machines we buy hobbled to suit Big Entertainment. So hardware makers quietly let slip the codes that region-unlock their DVD players, Apple decides to sell only DRM-free music through iTunes, so on. But as a maker of both content and equipment, Sony is a house divided against itself. The most notorious example: the day one of the world’s bigger PC builders also became a distributor of malware. If you bought music from them, they returned the favour by taking control of your PC. I haven’t bought a Sony product since.
They must choose now. Only by getting out of entertainment production – an industry already past its best days anyway – will they be able to return to doing what they always did best: Shiny things.