Sony virtual MSO play could hinge on Comcast

Conglom studying Xfinity/Xbox loophole

Sony Corp. is pressing pause on plans to launch a rival video service to cable and satellite companies in light of a recent Comcast decision that inflamed net neutrality advocates.

Michael Aragon, VP and GM of global video and music at Sony Network Entertainment, confirmed that his company is considering offering TV via broadband but is waiting for clarity on whether Comcast is allowed to provide consumers access to programming via its Xfinity app on the XBox platform without counting against the cable operator’s bandwidth caps.

“These guys have the pipe and the bandwidth,” said Aragon in an appearance Monday at Variety Entertainment & Technology Summit. “If they start capping things, it gets difficult.”

Comcast’s Xfinity exception spurred an outcry last month from Netflix CEO Reed Hastings, which in turn prompted the FCC to declare it would examine the situation. Comcast has noted that Xfinity programming moves across its own private, managed network as opposed to the public network where video from Netflix or Sony programming flows.

But Hastings has been vocal about his perception of a double standard. “Comcast no longer following net neutrality principles. Comcast should apply caps equally, or not at all.”

Last November, the Wall Street Journal reported that Sony was pursuing what’s known as the “virtual MSO” model, which entails getting rights to TV programming–perhaps in a bundle of channels cheaper than an MSO might provide–but without any of the geographic boundaries that hem in cable, satellite or telcos. But Sony has never publicly acknowledged its intent to get into that space.

“We do believe there’s a business model out there,” said Aragon of the virtual MSO model, who pointed to the catch-up TV services overseas as a potential model for a Sony service. “If we can get that, that’s certainly a differentiator that can make the economics work.”

Virtually every tech giant out there has been rumored to be exploring a virtual MSO model, though few have confirmed such intent, including Apple, Amazon and Intel. Sony is a logical market entrant considering its digital content storefront is made available through a wide range of devices manufactured around the world, from its XBox rival Playstation to Bravia TV sets.

The panel was moderated by Shahid Khan, chairman of MediaMorph.