Sony plans 'virtual' cable offering through PS3, Blu-ray, connected TVs

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Sony Corp. (NYSE: SNE) is actively seeking media partners for an Internet-based virtual pay-TV service to compete head-to-head with current service providers and to be delivered through Sony devices like Blu-ray players, televisions and its PlayStation 3.

The Wall Street Journal today reported that the Japanese company had talked with News Corp. (Nasdaq: NWSA), Comcast's (Nasdaq: CMCSA) NBCUniversal and Discovery Communications. Sony plans to offer smaller bundles of channels, a modified a la carte approach that will allow it to give consumers more choices at a lower price, kneecapping incumbents' offerings of larger, pricier bundles.

That plan, though, could stymie Sony with content owners worried that undercutting providers like Comcast could cost them money in the long run.

With 18.1 million PS3 gaming consoles in the U.S., as well as millions more Internet-ready Blu-ray players and televisions, the company's potential footprint overshadows any current service provider.

The rumor comes on the heels of similar discussions held by Dish Network (Nasdaq: DISH), with Chairman Charlie Ergen rumored to be considering a hybrid service of Internet-delivered channels supplemented by over-the-air distribution.

Ergen's hardware company, EchoStar (Nasdaq: SATS), meanwhile, also has eyes on the over-the-top market. The company, which acquired Move Networks in January for $45 million and, as a result, got the adaptive bit rate technology to stream live and video-on-demand content, says it's planning to roll out an OTT video service for service providers within the next six months.

"We saw the next logical progression as a move to a service-based system with the pitch being, if you have a pipe--cable, fiber or DSL--and you want to provide a video service along with a data service, we'll do that from the cloud," said Mike Hawkey, EchoStar's vice president of sales and marketing.

Google (Nasdaq: GOOG), of course, also has been rumored to be looking at its Google Fiber project, which it's testing in Kansas City, as a potential entry point to offering a pay-TV service as well. The gigabit FTTH would be more robust than anything currently offered.

For more:
- see this Wall Street Journal article

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