Sony's Plan for $40 Movies at Home

A 'home theatrical' offering under consideration would rent consumers a film just after it hits theaters but before it's available on DVD

By Ronald Grover

Companies across the consumer electronics landscape, from Amazon (AMZN) to TiVo (TIVO), are scurrying to deliver movies to TV via the Internet, some more successfully than others. But Sony (SNE) may be poised to do them one better. The Japanese electronics giant, which also owns a major Hollywood studio, has quietly been making the rounds among other film companies to sound them about showing their movies on TV after they appear in movie theaters but before they can be seen on DVD or online, BusinessWeek has learned. If the idea catches on, it would establish a new market for studios, who are facing declining DVD sales and an uncertain box office.

No studio has yet signed on, and no price has yet been determined. But under one plan being discussed, owners of the Sony's Internet-connected Bravia TV could pay as much as $40 to watch a movie that would be streamed over the Internet to their set, says one person familiar with the Sony presentation. The concept is similar to one Sony tested last fall, when it made the Sony-released film Hancock, which stars Will Smith as a bumbling superhero, available to Bravia owners with an online connection for their TV sets. Sony charged $9.99 for a 24-hour viewing period (the streaming started whenever you wanted during that period) for a two-week period from Oct. 28 to Nov. 10—after the film's July 2 release in movie theaters, but two weeks before its DVD release. Sony also mailed a free Blu-ray DVD of the movie to those who signed up. Uptake was light, in large part because there were so few Internet-equipped Bravia sets available. There are about 500,000 currently.

Sony's moves apparently are part of its overall effort to enhance the entertainment value of the company's consumer electronics devices. Last summer the company's Sony Computer Entertainment unit signed deals with seven studios to give its game users the ability to download to its PlayStation 3 console and its PSP portable player nearly 300 full-length movies for purchase or rental and more than 1,200 TV episodes. Those movies were available on a longer delay from the theatrical release than that which is being discussed for the home-theater service. The studio has since increased its offerings to more than 2,000 movies and 10,200 TV shows from 38 different content partners, according to Variety. Sony told Variety it has registered more than 25 million users since launching the service in 2008.

a "closed system" prevents piracy

To get studios on board, Sony is understood to be pressing the case that the Bravia is a so-called closed system, which means content streamed on the sets can't be pirated. No studio executive would comment publicly for this story. Sony corporate executives also would not comment.

Industry experts have speculated for years that there is a market of people who would pay a fairly steep price to see movies at home before they're available on DVD. With rising theater prices making an outing ever more expensive, families might gather with friends in their living rooms. That said, the audience could be very limited.

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