Head-in-the-sand Sony blames pay TV for Vue closure

Sony is convinced that PlayStation Vue set out to “completely rethink live and on-demand television” when really all it did was roll out an internet replacement for cable TV. Revealing the official shuttering of the SVoD service as of January 2020 after four years on the US market, Sony pointed the finger at a pay TV landscape averse to change, hindering Vue in its marketability in the face of inflated content and network deals. Instead of moaning, perhaps Sony should have turned this scenario to its advantage.

While the news came out of the blue, our sister service Rethink TV saw the writing on the wall a while back – producing a bullish outlook of just 150,000 new subscribers over the next 5 years to reach about 650,000 subs by 2023. Even with Vue’s demise, rival SVoDs will struggle to get excited about distributing such a measly number of refugees among them. More optimistic forecasts only had Vue in the region of 700,000 subscribers.

One possible nail in the PlayStation Vue coffin may have been administered by NBCUniversal. The Comcast-owned company had a long-standing content deal with Vue, but with NBCU’s own streaming service Peacock due to arrive in April 2020, Vue’s content deal was under pressure and with increasing content costs there’s no way Vue could afford it. NBCUniversal has streaming deals with other major internet TV providers like Hulu, Sling TV, YouTube TV and FuboTV, raising questions about these licensing deals, which NBCU won’t miss much given the marginal revenue contributions to the overall business.

But what about the technology backbone? BAMTech handled the bulk of streaming responsibilities for PlayStation Vue, before the back-end technology firm was acquired by Disney in 2017. That’s about it for detail, apart from being a cloud-based TV service with so-called intuitive search, recommendations based on viewing habits and a 28-day cloud DVR with unlimited storage.

Shortly after launching in 2015 with tiers ranging from $50 a month right up to $90 a month, Sony lowered the price of its internet TV skinny bundles down to $30 a month to attract millennials. Having presumably paid a fortune to secure licensing deals for the 85 channels that made up the initial offering, this wasn’t sustainable and Sony recently imposed price hikes for Vue which clearly received an unsavory subscriber response.

In early 2018, the National Cable Television Cooperation (NCTC) signed a pact with Sony for PlayStation Vue whereby NCTC members were able to offer access to PlayStation Vue in bundles – a term that has come to mean programming packages that favor OTT content over traditional linear TV. So, Vue – a service designed to disrupt cable TV – ended up partnering with cable TV and then ultimately failing.

“PlayStation fans can continue to access movie and TV content through the PlayStation Store on PS4 and via our partnerships with top entertainment apps. With 100 million PlayStation 4s in the market today, our community continues to grow and thrive. We will continue to deliver the best entertainment experiences across the network, along with other key gaming services, including PlayStation Now and PlayStation Plus,” said Sony in a statement.

PlayStation Vue should have got into original content hard and fast early on and gradually reduced its reliance on the licensing deals it had with the likes of Viacom and NBC to differentiate. Why PlayStation Vue never reaped the benefits of Sony Pictures Television, one of Sony’s few success stories, beats us.

But as Faultline foresaw at the time in 2015, the problem with Vue is that there were just so many ways for Sony to fail. Targeting around 34 million PlayStation console households in the US at the time of launch was a tall order, with a sizable share being too young to buy into Vue and an even larger share preferring gaming over TV.

Blaming your shortcomings on pay TV for being sluggish to adapt while simultaneously having your head in the sand is highly hypocritical.