Sony Music Challenges Apple iTunes

Sony Music Group has a long history of non-transparency with customers, even scandals involving the inclusion of dubious copy protection software on CDs, but is seems like the media company is trying to change. In an interview, Sir Howard Stringer, Sony Chairman, President and CEO, said that “Sony has begun the transition from a closed system to an open one.”

He explains that “Sony hasn’t taken open technology very seriously in the past. Its CONNECT music download service was a failure. It was based on OpenMG, a proprietary digital rights management (DRM) technology. At the time, we thought we would make more money that way than with open technology, because we could manage the customers and their downloads.”

However, it has become evident that people are dissatisfied with restricted access to music, and Stringer thinks that if CONNECT had been ‘open’ instead of being controlled by digital rights management, then Sony “probably would have beaten Apple Inc. of the US.”

There’s still a chance for Sony to make a comeback in the online digital music market. Stringer says that Apple’s iTunes Store uses its own proprietary DRM, Fairplay, and therefore Sony can provide “something that Apple can’t”. If Sony starts providing an equal system to iTunes without copy protection, then maybe the company has a chance, but Stringer says that they must “grab that opportunity before Apple begins to provide support for other hardware and blocks us out.”

It seems Stringer is really in touch with music consumers’ desires, and ‘open’ technology isn’t his only focus. He insists that “prices should also be reasonable and reflect what customers are willing to pay.” Some music fans are willing to pay nothing, and even though access to free music on the Internet is threatening the music business and copyright laws, Stringer doesn’t see any other options. His solution, treat the customer like a king:

“We have to create a sanctuary which provides customers an environment for their enjoyment. That is how we can change a threat to the content business into an opportunity.”

Does it sound like a plan? Sony expects a $1.5 billion net loss for the 2008 fiscal year, so what does the company have up its sleeves?

Image via sonydefenseforce.com
Source: TechOn

(Thanks to N’Gai Croal)