Business Matters: Is Music Still Core to Sony Corp's Mission?

Music May Be Losing Significance to Sony
Sony Corp. wants to revitalize its electronics business, but how will it use music to get there? The company announced a transformation plan Thursday that includes shedding 10,000 jobs, or 6% of its global workforce.

Music was mentioned only once in the press release about the transformation plan - as a leverage point in strengthening its mobile business - but that single occurrence speaks volumes about music's role at the company. Sony is targeting mobile sales of 1.8 trillion yen ($22.3 billion) and "significant profitability improvement" in fiscal 2014, and it believes music, movies and games will play important roles.

Here's how I interpret Sony's stated intentions:

1. Sony still considers music to be core to its business. While the company's music divisions have improved market share since the Sony BMG joint venture with German media giant Bertelsmann, a parent company's interest in music should not be taken for granted these days. Sony owns 100% of Sony Music Entertainment only because Bertelsmann sold its half of the Sony BMG joint venture and shifted its focus to its (mostly) music publishing company. Even with the challenging state of the music business, Sony would have no problem finding bidders for Sony Music Entertainment and/or Sony Music Japan if it wanted to divest its music assets and focus on other its segments. But Sony clearly values the potential synergies its music catalog can create for its other divisions.

2. Sony's recorded music could be bundled with Sony smartphones, tablets and PCs in the U.S. and elsewhere. As reported Wednesday by Billboard.biz, the Copyright Royalty Board (CRB) will set U.S. mechanical rates for new digital services such as a "mixed service bundle" that combines downloads with a non-music product such as a smartphone. Bundling downloads with portable devices was hardly impossible prior to the new rate formulas, but the costs of such a promotional tactic are now predictable and standardized.

3. Music Unlimited could start to play a greater role in Sony's mobile plans. Sony is using its Music Unlimited subscription service as a way to increase the value of its home entertainment products such as DVD and Blu-ray players, Michael Aragon, Vice President & General Manager, Global Digital Video and Music Services at Sony Network Entertainment told Billboard back in October. But Music Unlimited works on TVs, PCs and Android devices, and Sony's mobile devices could ultimately benefit from device-subscription bundles. The new CRB formulas could again help Sony because the "mixed bundle" mechanical also covers subscription services bundled with non-music devices like a smartphone.

The Echo Nest Links Up WIth Jambase, SongMeanings
The Echo Nest has partnered with Jambase, an aggregator of concert info, and SongMeanings, an online lyric community, to improve its music intelligence platform. The two new partners are part of the Echo Nest's Rosetta Stone project, a platform that helps various music services work together.

Developers will now have access to Jambase's concert listings and SongMeanings' database of lyric interpretations from its community of users. Previous Rosetta Stone partners include music services Rdio and Spotify, lyric provider LyricFind, Twitter and secondary ticketing service Seatwave. ( The Echo Nest press release)

Marley Documentary Being Released Via Facebook on 4/20
Marley, a documentary on reggae legend Bob Marley by director Kevin MacDonald, is being released simultaneously in theaters and online at Facebook. And, to no surprise, the films debuts in both theaters and Facebook on April 20 (4/20).

The online rental uses the technology called Social Cinema by Milyoni. Social Cinema allows viewers to rent a movie at Facebook using Facebook Credits, PayPal or a credit card. A "Marley" rental on Facebook will cost $6.99. Each video player has what Milyoni calls an "interaction zone" for viewers to chat with friends and share favorite clips. Milyoni was the first to host a live pay-per-view concert on Facebook (Widespread Panic from Austin City Limits) and released the movie The Big Lebowski on Facebook in August.

Nearly 38 million fans currently "like" the Bob Marley Facebook page, making it one of the 20 most popular Facebook pages. The April 8 post at Bob Marley's Facebook page that announced the arrival of the movie has received nearly 46,000 likes and 1,200 comments.

Facebook started experimenting with movie rentals last year by Warner Bros, Paramount, Universal and Miraxmax to much media fanfare, but the concept hasn't really caught on with consumers. Miramax's eXperience app for example, currently offers 10 movies such as Amelie, Clerks and Good Will Hunting for purchase for $9.99 or 100 Facebook Credits apiece. Facebook currently lists the number of users of Miramax's app at just 2,000 monthly users. The app launched last year with titles renting for about $3 apiece. The other studio's apps emphasize contests and promotional videos and lack video rentals. ( Jambase)