Sony's music comeback story needs third act

Sony's quest to return to a position of power in the music sector already faced plenty of obstacles.

A reputation for writing flawed software was one. Another was the company's history of creating failed consumer-focused media services that appeared more concerned with satisfying honchos at the company's film studio and record label. The company's hardware and software makers struggled to build devices and services that allayed security concerns held by content creators. Sony Connect, the so-called iTunes killer that bubbled up out of the chaos, was a glitch-prone and DRM-laden fiasco that launched to great fan apathy.

Then, early this year, Sony was just getting out the door with a subscription music service, called Music Unlimited powered by Qriocity, when the start-up saw its brand tainted by a massive security breach. In April, hackers infiltrated Sony's security systems and made off with personal information belonging to more than 75 million users of PlayStation Network and Qriocity. The fledgling service is now more associated with pilfered data than it is with music.

If Sony plans to write its own Rocky-esque digital-music story, the time has come for the company to drag its bruised-and-bloodied self off the canvas and start landing some blows of its own.

That's what the company says it has begun doing. Last week, Qriocity widened its mobile availability by launching an Android app. Before that, subscribers could only access their Qriocity digital lockers via their PlayStation, PC, or PlayStation Portable device as well as some Sony TVs and Blu-ray players. Sony was lambasted in February for launching Qriocity without any on-the-go listening options. Lest we forget, it was just over a decade ago that Sony and its Walkman CD player were synonymous with portable music. Since then, Apple and its iPod, iTunes, and iPhone have shoved Sony and Walkman into the shadows.

This time around, Qriocity has an eye on the future and has already staked out cloud turf. Sony and Qriocity outpaced all the major players--Apple, Amazon, and Google--by launching a licensed cloud music service. For $9.99 a month, Sony offers on-demand and unlimited access to the company's 7 million-song library (Qriocity also offers a more restricted version for $3.99). Sony subscribers can also access songs they've ripped from CDs or in their current MP3 library if they opt in. Sony's licenses with the major record companies allow it to store recordings. They will then offer these recordings to Qriocity users once the company scans their hard drives and makes sure the music is in their possession. Users can then access their digital lockers from Web-connected devices. Earlier this month, Apple announced that iTunes would launch a similar feature.

Sony also plans to burrow into the music-listening habits of consumers with the help of PlayStation consoles. Sony considers the living room valuable and untapped music-distribution territory and believes people want to enjoy music in their homes, said Michael Aragon, vice president of global video and music services for Sony Network Entertainment. That's the division that oversees the PlayStation Network and Qriocity.

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All of these service features and business strategies won't mean much if Sony can't protect personal data of PSN users. Aragon is very aware of this. About six weeks before the illegal intrusion, Aragon met with CNET at the company's West Los Angeles building. Back then, Aragon was focused on creating a winning product and said things like: "I think for us, the sweet spot is right where we are, which is we can tell the consumer you don't ever have to manage a file again. You hear a song you like, click a button and its there on all your devices for you."

Last week, in a phone interview, Aragon made it clear that the first concern for Sony and his division now is protecting customer information.

"The (intrusion) has obviously affected our brand," said Aragon, 38. "But what I can tell you is that the highest priority for our division and for our company is winning back consumers...we know our brand can recover if we can assure our customers that their data is protected."

Aragon didn't provide much news about the hack itself, other than to say that Sony was amid a transition to a new data center when the digital burgling occurred and is now with a company that offers "state-of-the-art security."

Should Sony avoid another security scandal, then it will have only to worry about competing against the likes of Apple on providing the best service. Aragon acknowledges that when he was offered a position with SNE, he had reservations. He had heard the talk about Sony Connect, about how the service revealed how bad Sony was at writing software and how it failed in the past to come up with compelling media distribution services.

"Frankly, I was a little concerned just because Sony had tried creating (digital media services) multiple times," Aragon said. "I was a little apprehensive and I wanted to know what would be different about this attempt."

He signed on after learning that what was new was Tim Schaaff, president of Sony Network Entertainment, an executive who once oversaw Apple's QuickTime division. Schaaff had the right kind of "street cred." He also saw a commitment by Sony to foster more cooperation among its different units, including Sony Music Entertainment (one of the top four record companies) and Sony Pictures, a major Hollywood film studio.

Any skepticism about SNE from the other units quickly vanished, Aragon said. When it came to the movies that SNE sold or rented via PlayStation Network, the studios and networks were won over by the sales figures. In music, Schaaff and Aragon eased security concerns about the cloud. For instance, they make it hard for users to share their Qriocity libraries with others by allowing a user to access a digital locker with only one device at a time.

"I think the other Sony (studios and labels) like us because we try to be respectful of the content," Aragon said. "It's in our DNA obviously with Sony Pictures and Sony Music. That doesn't mean we want to be overly obtrusive in terms of content protection, but we do respect content."