Sony Looking to Cut Out Cable Providers with Web-Based TV Service

Last week, we noted that Sony was working hard on efforts to change the way users interact with and view content on their television sets, with CEO Howard Stringer openly acknowledging that the company was trying to find a way to compete with Apple's integrated ecosystem that is expected to expand to include television sets in the relatively near future.

The Wall Street Journal now reports that Sony is working on the next phase of its efforts, seeking to launch a Web-based alternative to traditional TV that would skirt around cable companies' control of the market.

Sony is proposing to beam the channels over Internet connections to Sony-made devices, including PlayStation gaming consoles, TV sets and Blu-ray players, the people said. Sony has sold about 18.1 million PlayStation 3 consoles in the U.S. alone, according to NPD Group Inc., and many homes have other Internet-connected Sony devices.

Sony has reportedly reached out to a number of content providers, including Comcast NBCUniversal, Discovery, and News Corp., in attempt to strike deals to offer their shows on the service.

One stumbling block could be Sony's desire to license a smaller bundle of channels than existing cable operators offer to undercut the incumbents on price and flexibility, according to people familiar with the matter. That could be a nonstarter for media companies, which would prefer not to undercut their biggest customers.

The report notes that Apple made a similar effort several years ago, seeking to put together a "best of TV" package for delivery to viewers via iTunes, but those negotiations failed to produce a deal after content providers refused to budge on their demands for bundling channels together.

Apple clearly remains interested in the television market, with rumors of a Siri-enabled TV set launching in late 2012 or early 2013. It is not entirely clear what efforts Apple may continue to pursue on the content side of the TV market to complement the hardware and software, but just two months ago the company was said to have developed a "new technology to deliver video to televisions". As part of that work, the company was said to still have an interest in offering some sort of subscription TV packages.