Synergy-minded Sony takes united flight to Vegas

Conglom makes presence felt with Stringer's keynote, floor display

For the past year, Sony has been talking the talk of corporate synergy. At this year’s Consumer Electronics Show, the entertainment/tech conglom must prove it can walk the walk.

Sony clearly thinks it’s ready to do so. It’s making its presence felt not only through a much-anticipated keynote by new CEO Howard Stringer, but with the largest floor display in CES history: 25,000 square feet.

It will be notable for more than its size. In a shift from tradition, every Sony division — from movies to music to gaming and electronics — will be there, not only showing themselves off, but demonstrating how they work together within the larger corporate family.

“For the first time, we will be a unified company,” says Sony Electronics chief marketing officer Mike Fasulo, who’s overseeing the company’s CES presence. “As part of (Stringer’s) vision for the company, we have spent the past seven months putting together something for the floor that shows all the assets of Sony and demonstrates a lot of collaborative activity that’s been going on.”

Sony comes to CES with a number of challenges. Its electronics business has been struggling for several years; Sony Pictures has had a weak year, marked by a number of high-profile misses; Sony Computer Entertainment (vidgames) faces a fiercely competitive Microsoft and an industry that has recently been shrinking; and the world is waiting to see whether Blu-ray, the high-definition DVD standard on which Sony has staked much of its future, will hit the market soon and be successful.

“They’ve already told their financial partners that this is the year they turn around,” observes Envisioneering Group analyst Richard Doherty. “This is my 28th CES, and I’ve never seen so much pent-up interest in a presentation. Retailers, competitors and suppliers are all eager to see what Sony is going to commit to.”

Meanwhile, Sony must also show it can finally compete in a market that should be a natural for it: digital content distribution.

Thanks to last year’s acquisition of MGM, Sony has the largest film library of any studio, plus sizable music and vidgame assets. And with tens of millions of PSPs, PlayStations and computers in the market, it has devices to play them.

However, Sony’s market response to Apple’s incendiary iPod players and iTunes music service — Walkman and Sony Connect, respectively — have been busts so far. Meanwhile, Movielink, the online film distribution service that Sony developed, remains a small operation owned by five studios.

That’s expected to change this year. According to several CE insiders, Sony will upgrade Connect into a robust digital distribution platform that includes not just music, but also movies and games. Rather than becoming yet another digital media service for PCs, Sony is designing Connect to work best with the PSP and PlayStation 3.

While consumers primarily buy the PSP — as well as the upcoming PS3 — for vidgaming, both consoles are capable of accessing, storing and playing music and movies too. Movies on Universal Media Disc — the MiniDisc format that plays on the PSP — have already proved popular. But downloading films, TV shows, music and games onto the PSP is the ultimate killer app.

And with an expected always-on broadband Internet connection, PS3 could prove just as important for its ability to access movies, music and games off the net from Connect as to play vidgames and movies on Blu-ray discs.

Visitors to Sony’s booth — and it’s hard to imagine anyone at CES who won’t be drawn by the ceiling-high tower full of LCD screens rising out of the center — will see all this and more. Rather than strolling in and out, they’ll first sit through a short film that provides an overview of Sony products and strategies. The producer? Sony Pictures, of course. And in addition to new devices, it will feature clips from Sony BMG artists and upcoming pics including “The DaVinci Code.”

Once inside, visitors will see what Sony considers the four pillars of its unified business: hi-def, digital cinema, E(lectronic) entertainment and videogames. Each pillar will feature content and devices from numerous Sony units — an effort to prove Sony operates as much by themes as by discrete divisions.

There will also be a stage featuring product demos, musical performances and a behind-the-scenes peek at upcoming CG toons from the conglom’s new animation division.

In other words, even if CES attendees are only interested in Blu-ray, they’ll get the entire Sony experience. They’ll be the first to see whether a unified Sony is really greater than the sum of its parts.

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