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Sony UMD Ripe for a Movie Revival

22 May, 2007 By: John Gaudiosi



The UMD format is about to get a boost of support from Hollywood studios.

Sony Pictures Home Entertainment is the only studio providing new UMD movies for the PSP, but that may be changing, said Peter Dille, SVP of marketing at Sony Computer Entertainment.

Bolstered by the price drop in April from $200 to $170, hardware sales on the PlayStation Portable, which plays UMDs, are up 40%, Dille said.

“The story on UMD is that we didn't do a very good job at launch with articulating what consumer we were going after,” Dille said. “The studio said ‘here's a new format.' And that triggers a bunch of things in the Hollywood pipeline that really didn't make sense for PSP. Shame on us, because we didn't explain we were aiming at 18- to 34-year-old males. We're looking more for Jackass-type movie content. There was a proliferation of UMD movies that didn't make much sense, and they backed up at retail.”

Since then, Target has recently come back on board with UMD support, and, Dille said, now all of that is in the past.

“We have a much better dialogue with Hollywood, and they understand what we're doing,” he said. “We're talking to some of the studios for deals where we'll do the distribution ourselves. We want the content out, and the Hollywood studios want to get the content out. So we're telling them, ‘if you're worried about managing the business yourself, let us handle it for you. We'll manage it under the PlayStation umbrella.' They're excited about that, and we think that's a pretty neat way to go as well.”

Dille said announcements will be made soon regarding UMD movies.

“There's a bright future for non-game content on PSP, some of which will be available via its own download service later this year.”

Dille said the entertainment download systems for PSP will be different than the PS3 digital distribution pipeline. He said, ideally, both download services will be announced and explained at the same time.

“PS3 and PSP will be separate download service, but it'd be great to tie it all together and have one cohesive message.”

Billy Pidgeon, videogame analyst at IDC, said Sony needs to reduce the price of UMD movies. He said $20 is too much for films that don't have special features and that most gamers already own in some other form.

“UMD movies should be $10; games should be $20,” Pidgeon said. “But I understand that it costs a lot of money to develop a PSP game, so that's what that $40 price is paying for.”

New PSP

According to several analysts, including Lazard Capital Markets' Colin Sebastian, Sony is expected to unveil a new PSP later this year that will take advantage of the new entertainment download service in the works.

According to some rumors, the new PSP will come equipped with a hard drive to let consumers download music, movies and TV shows directly to the system. The current PSP requires Sony memory sticks to watch downloaded content.

Forrester Research analyst James McQuivey said the PSP has the potential to be a leader in the handheld entertainment market, but Sony has yet to capitalize on this synergy.

This year, Sony will ship 140 PSP games, including exclusives such as SOCOM Tactical Strike, God of War II, Parappa the Rapper and Syphon Filter: Logan's Shadow.

“The Sony PSP is one of the best portable entertainment media devices that anyone has come up with in years,” McQuivey said. “It has a relatively big screen, plays video beautifully, and has good storage and audio. It could have been the first big mobile carrier for TV shows and movies.”

McQuivey said in a recent report that one reason Sony may be taking so long with its digital distribution store is because it might be viewed as a failure of its UMD format.

“Sony hasn't won a format war ever,” McQuivey said. “Sony can't get over the idea of controlling the media format. This problem of Sony's goes back to the Betamax. They don't just want to make the device that everybody wants. They want to own the entire format.”

Sebastian said that Sony pushing its own approach has resulted in nobody using its memory stick or UMD formats.

“So you don't have the same robust market that you could have had if Sony said, ‘We're going to open this up. You can put your Windows Media files on here. You can put your QuickTime files on here,’ McQuivey said.

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