Category Archives: Business

Why Sony’s iTunes competitor will fail – and how they could (but won’t) make it work

Back when the Playstation 3 was in the works, I wrote a lot about Sony’s misguided strategy for the console. My doomsday scenarios haven’t come true, but the company is definitely struggling — losses are projected at $674 million this year after $2.6 billion in losses last year, according to BusinessWeek. (“The two worst-performing products: TVs and video games.”)

So it’s great to see Sony has more dynamite ideas up its corporate sleeve. Like building an iTunes-like service. Because everyone knows consumers are looking for yet another site where they can pay to download movies/shows, music, and books!

Surely Sony has some secret sauce that’ll make this service stand out from the zillions of other similar services, both living and dead. Take it away, BusinessWeek:

Sony will try to differentiate its service from iTunes. One example: Users will be able to upload videos shot on camcorders, save photos taken with digital cameras, and post other digital content to their personal online accounts. … At some point down the road, Sony would consider letting independent software developers create applications for the service, much the way Apple does for its iPhone.

[Slaps forehead as crickets chirp.]

Continue reading

About those "failing" newspapers…

A couple of things jumped out at me in this New York Times story about the sorry state of newspapers. Richard Perez-Pena makes the case that while things have been bad for a while,

what is happening now is something new, something more serious than anyone has experienced in generations. Last year started badly and ended worse, with shrinking profits and tumbling stock prices, and 2008 is shaping up as more of the same, prompting louder talk about a dark turning point.

Most of the evidence is nothing new: circulation keeps dropping; print advertising is falling (especially real estate ads) and online advertising both doesn’t make up for that loss and isn’t growing as quickly as it was; “Job cuts have become all but universal.”

But then there’s this, about three-quarters of the way through:

Newspaper profits remain healthy, but they are dropping fast. For example, the newspapers of Media General, a large Southern chain, had a 17 percent operating profit margin last year, but the dollar amount fell 23 percent from the year before. The Gannett Company’s newspaper division, the nation’s largest chain, had a 21 percent margin, but a 10 percent decline.

Excuise me? I baking powder? Profits are healthy, Gannett has a 21 percent margin — and the fuss is about what now? You want real economic doldrums? Check out the auto industry. Ford lost $2.7 billion in 2007 and $12.6 billion the year before — and those aren’t just losses in market capitalization (that was probably a heck of a lot more), but $15 billion in actual money down the drain. Think they wouldn’t kill for that 21 percent margin? (Their 2007 margin: minus-6.8 percent.) Continue reading