Sony Corporation business model
After the disastrous attempt by Intel (INTC) to develop and offer an online TV service called OnCue last year, it's not that exciting to hear Sony (SNE) make an announcement concerning Web-based TV. The challenges faced in the sector by Intel haven't been resolved yet. Until and if they are, the idea of Web-based TV services are nothing more than a dream, as far as being profitable goes.
(click to enlarge) source: StockCharts.com
In the early part of 2013, Intel made an announcement it would have an Internet TV service available by the end of the year. The opposite happened, as in a very public manner Intel had to admit it was abandoning the project. It is reportedly in negotiations with Verizon (VZ) to acquire the unit.
Some have attributed this to a change in leadership at Intel, but it appears to be much more basic than that. Content seems to be the major issue that this industry faces. It's unclear how Verizon will overcome this issue at this time.
Sony's Web service
There are two elements associated with the streaming service being developed by Sony. One is the TV content side, and the other is gaming. Of the two, gaming has the strongest potential.
For the Web-based TV service, Sony will deliver on-demand and live programming now available on television. It appears to be a preliminary deal in place with Viacom (VIA) (VIAB) for online streaming rights.
The question that comes to my mind is who will want a service that is basically the same as now offered by cable, satellite and telecom companies. It seems like the targeted audience would be an older demographic, as younger viewers tend to put together their own array of content. I don't see how they would gravitate toward what would be the same thing offered by other companies with the difference being a digital delivery system without a cord or satellite.
By that I mean cable companies can offer streaming content if a customer has acquired an Internet service with it. Sony and Verizon, among future competitors in the space, would offer content via streaming alone.