Sony to Revamp Their Music Download Service

Sony™s music download service, Connect, will see new changes this year, starting in March of 2006. Connect, which is Sony™s answer to Apple™s lucrative iTunes digital music/video business, is getting the make-over to improve market share. In addition to music, the new version of Connect will also offer services such as downloadable video, movies, and PSP games. In a company statement, Sony said, “Soon, Sony will be rewriting the rules once again. The Connect service will enable you to download hundreds of videos, games, and TV shows as well as films and other content. You’ll even be able to browse from a wide selection of books.” It is no wonder that Sony is upping the stakes. iTunes has a worldwide market share of approximately 70%, and with the advent of video capable iPod machines, the potential profits for Apple increase significantly. Sony is trying to squeeze itself into this niche, with the hope of coming away with a few more percentage points. Market experts point out that competition between vendors is always a good thing for consumers. The vying for market share drives down the price of product. If this age-old business theory is correct, we might expect some price wars between the two behemoths, Sony and Apple. But to be truly competitive, Sony may need to rethink their strategy further. The popularity of iTunes is in large part due to Apple™s ubiquitous portable iPod music players. At this time, Sony has no comparable music machine that is as popular, unless they are banking on the sales of their multi-functional PSP handheld game console. But the form factor of the PSP makes it an unlikely substitute for the smaller sized iPods. This leaves one other possible step for Sony to take: develop a new portable music player. There definitely is room for some competition as mid-level iPod machines are going for $200 to $300. Whether Sony decides to enter the fray of developing a low cost alternative to Apple™s iPod is anyone™s guess. But if there is anything to learn from the price trends of electronics, the prices for MP3 players will surely drop.
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