Sony pulls the plug on Connect, refocuses on PlayStation

After a lengthy, albeit fledgling stay in the digital music distribution biz, Sony has reportedly decided to cut its losses and disconnect the Connect service. We'd already seen the service get shuffled around in an effort to strengthen the division, but it seems like it has finally succumbed to the competition. According to reports from an internal meeting, some 20-plus employees were told that their jobs were being "phased out" as the Connect resources were being shifted to handle the needs of the PlayStation group. Interestingly, it was noted that the eBooks segment would still remain alive and well to service the Sony Reader demands, but Steve Banfield, the head of the Sony Connect division, would be "leaving within the next few weeks." Farewell Connect, it seems we all barely knew you.

[ryan10ad @ Jun 17th 2007 3:00PM]

Sony - 0 iTunes - 1

[Big @ Jun 17th 2007 11:49PM]

Alot of people who hate SONY want to see SONY fail but ultimately, they will only lose profits and will always bounce back.

PS3 may not have enough games to be considered a major gaming console, but, Playstation 2 game sales are still generating tremendous revenue and the PS3 is still helping Blu Ray DVD sales beat HDDVD.

So what Connect is being phased out. At least they will be able to focus on making the Playstation better. In the long run that will probably generate more revenue than downloading songs will.

[jay @ Jun 17th 2007 3:00PM]

Nobody cares.

[wako @ Jun 17th 2007 3:00PM]

I am honestly amazed on how Sony is still alive as a company. Without the Playstation brand and the total domination and success of the previous console wars, I could swear Sony would've been no more.

The company seems to be a in a state of total confusion and year after year they continue to release products that totally fail. Like the PSP for example, the product could've been so much more, however they kept investing it as a media device, however the UMD format never caught up as a media device other then games and it totally failed and allowed the Nintendo DS to continue to take the reigns of the handheld market.

Sony honestly seems like the next Ford company, a company that should be dead but it is just draggings its feet on the way out.

[Ayle @ Jun 17th 2007 3:13PM]

You know that Sony's also selling TVs, Home Cinema sets, Hifi components, Pcs, etc etc? And they were doing that way before the Playstation was created....IMHO even if the PS3 fails, it will be a huge blow but that wont be enough to sink the company....

[Bootes @ Jun 17th 2007 9:30PM]

The PSP is the best console I have every owned, and I've owned a lot of the.

[wako @ Jun 17th 2007 9:32PM]

Im happy that is the case for you Bootes. However the majority of the world doesnt agree with you. Look at the sheer sales compared with the DS. The PSP is trailing and trailing badly. Many attribute this to the fact they kept pushing UMDs down people's throat while not focusing on games for the platform

[Jeff @ Jun 17th 2007 11:33PM]

"You know that Sony's also selling TVs, Home Cinema sets, Hifi components, Pcs, etc etc?"

Not to mention financial services, which at times has carried the entire company as their other divisions have foundered. This is the real dark horse of a lot of companies - providing financial services under contract for other corporations. GE, for example, makes most of its money this way. Sony's financial services division isn't quite as big, but its often profitable enough to subsidize less profitable divisions.

Overall, Sony remains a profitable company. I'm not sure why anyone would think they "should be dead". Should MS be dead because the Zune isn't selling well?

[James @ Jun 18th 2007 9:20AM]

Wako, you ARE joking, right? No-one is that big a moron.

Do a search on Wikipedia for a list of Sony patents - you may be surprised what you read.

[Bachus @ Jun 17th 2007 3:14PM]

umm... wako? sony makes alot of tech. i mean ALOT of tech. not only tech goodies, they have a film production company, a music label, and many other things. the failure of one division and the struggling of another do not make for a struggling company.

Your analogy fails: Ford only makes cars.

[mike @ Jun 17th 2007 3:33PM]

Your analogy fails: Ford only makes cars.
--

Um Genius, the fact that Sony is trying to be in about 25 different markets tells you that they are scrambling to be good at everything.

Being the Microsoft of the Electronics industry is not a compliment.

We can only wish that Sony was focused on one or two markets.

A movie studio?! Are you kidding, that's the reason why they've been so hard up for DRM. That's a detriment to everything else they do! Same goes for the Music business (rootkit...rootkit...rootkit...)

I love how you assume just because they're 'in business' they must be profitable in all those areas.

[Bobby @ Jun 17th 2007 7:15PM]

You're a fart.

[John @ Jun 17th 2007 8:42PM]

And just because you apparently don't like Sony doesn't mean they're losing money in all areas either.

[Jeff @ Jun 17th 2007 11:35PM]

"Being the Microsoft of the Electronics industry is not a compliment."

I'm pretty sure there are plenty of companies out there that would give half their profits to Satan for all eternity in order to be called "the Microsoft of the electronics industry" just once in public.

[Joe @ Jun 17th 2007 3:52PM]

Sony just got kicked in the harbL. Apple power baby. :)

[Manfred @ Jun 17th 2007 3:56PM]

Today they are closing down Connect.
Tomorrow, they will be cutting at the PS3 department.

Sony is more than dead already.

I used to buy lots of Sony stuff.

Today, I am holding off my purchase on Sony stuff .

For notebooks, I am just bought an HP instead of VAIO. More storage, faster CPU for a lower price.

For handycams, I bought a Panasonic 3ccd HD CAM instead.

Replaced my PS2 with a Wii last Xmas.

For walkmans, I still have a HiMD, but SonicStage software sucked. Do you know how much pain it is to transfer music to it?

During my move to a new apartment, I really wanted to get a Bravia . . . but got a Samsung instead. Samsung was better.

In each and everything product line, Sony simply was not the best anymore. Sony should thank me for keeping them in my head, considering Sony each and every I bought some gadget.

I used a Sony Alpha A100 for about three months, tested every single lens they made. Then sold it. Back to Nikon D200 . . . and my trusty Leica MP. Sony Zeiss lenses is crap sold at a high price.

Go eat yourself Sony.

[babyfool @ Jun 17th 2007 3:57PM]

Sony own buisnesses that have conflicting interests. For example, if you build a meida player for sell, you want it play as many format as possible so consumer who owns any format can use this player. If you make a movie, you want to put it on as many format as possible so any media player can play it.

Sony owns both the Media Player and the Movie making industry, so they try to restrict their Movies to be play playable on their own Meida Players.

The similar argument can be made for Apple. Apple always say "people serious of making software will build their own hardware." The trueth is that they are doing the samething that Sony does. You can see that Microsoft do buid their Office product for Mac, but do you ever see that Apple build ILife for windows? The reason is simple, Microsoft only makes software so they want their software to be usable on any computer hardware, but Apple makes both so their software will only work on their hardware.

As consumers, we should be smart enough to realize that companies that Sony and Apple is in fact acting against our interest by trying to force us into buying only their product. This would only work if they do an extremely good job, but the trueth is that nobody will be able to come up with perfect products on everything. So at the end, once Apple becomes as big as Sony is they will start to make mistakes like Sony does right.

[Muneer @ Jun 18th 2007 12:54AM]

You're new here.

Apple is *always* good. No matter hat they do, it is important and innovative.

Sony is mildly bad. One thing, is anytime there is anything said about Sony, you need to say "Got rootkit?"

Microsoft is *always* bad.

[Mr. B @ Jun 17th 2007 3:59PM]

Sony still makes good TVs and sexy laptops, they'll do alright.

[wako @ Jun 17th 2007 4:07PM]

Sexy laptops wont save Sony... unless their Apple...

[wako @ Jun 17th 2007 4:05PM]

Yes, Sony also does own other divisions that might be profitable. However, if you simply google up "Sony fiscal year" they have been consistently loosing a lot of money every year. Mostly because of the R&D they put on small projects that end up failing.

And like what Mike said, their other divisions arent doing too hate as of late either. The WHOLE Sony group has taken a beating from last year as they tried to push UMD formats. From their Playstation brand, record brand, to their Movie studio.

Their TVs arent as competitive as they once were either. With a lot more competition, like Sharp and Samsung, their brand is facing quite a rough time. Last time I checked they cut off alot of their product line because their TVs werent doing so hot, specifically I believe are their Plasma screens.

Bachus, you obviously do not understand the analogy. Im saying they are a dying company. In no way am I even comparing their products to one another.

[Bachus @ Jun 17th 2007 4:23PM]

all i was really getting at is that sony has a hand in lots of different markets where as ford sticks to one. i did understand the anology, and i know certain products of theirs aren't succeeding, but you aren't going to see sony bankrupt or absorbed anytime soon because they have other branches of revenue to bank on.

[Jeff @ Jun 17th 2007 11:49PM]

"However, if you simply google up "Sony fiscal year" they have been consistently loosing a lot of money every year."

Jesus Christ, what is this, revenge of the nerds today? You've gotta be the same guy posting over and over, and your info hasn't gotten any more correct with each new post.

A simple check of Sony's key statistics shows that they made $19.75 *billion* in gross profit the past fiscal year, and $1.02 billion in net profit. Their revenue has grown from $60.5B in fy 2003 to $67.1B in fy 2007. They have not had an unprofitable year in the last 5 (the furthest back my E-Trade account will show).

I don't know what the hell you're looking at, but if it's telling you that Sony is unprofitable as a company, it is not correct. My guess is you are looking at reports on their game division alone, or you're reading summaries written by people (most likely on gaming sites) that themselves don't understand that Sony != SCEA.

Sony is a large and growing, profitable company. So you may as well quit it with the death knells. There's about as much chance of Microsoft going out of business.

[Mp3 @ Jun 17th 2007 4:14PM]

What this really means is that Sony Walkman products will start to be open to the other music services out there. Not bad if you ask me.

By the way, if you think Sony is hurting, look at the #s (or should I say $s) again. #1 TV business, #1 camcorder business, #2 camera business, #1 video game business, #1 music company, #2 movie company by $ last year. Not to mention all the professional gear they sell to your local TV station, MLB, other movie studios, etc. Not to mention all the semiconductors they sell to other electronics companies (think your Nikon camera doesn't have a Sony CCD? Think again.)

True some things about the company are frustrating, but at least they innovate. Not everything is a winner, but I'd rather have the choice as a consumer to purchase something or not.

[Matt O @ Jun 17th 2007 4:17PM]

im writing this on my sony vaio sz, sure it was more expensive then the competition but its light,sleek, reliable, and they have great customer service. Sure they make wrong moves way to much but they still our one of the biggest players in the technology sector.

[Manfred @ Jun 17th 2007 4:37PM]

Can you please everyone here how much the replacement battery costs?

I bet they will be shock!

Sony is such a rip-off on parts.

[Ravi @ Jun 17th 2007 4:56PM]

Crap! I have around 60 free songs credit on my connect account. Better download fast

[cduran01 @ Jun 17th 2007 5:03PM]

This is actually great for the Playstation group.....I can see them moving the Connect resources over to Playstation Home and the Playstation Network.

This is the sort of stuff Stringer (their CEO) was talking about when he said that they were going to reorganize the company so that the independent groups are all on the same page. The biggest problem with Sony in the past has been that each group operated for their own interests no matter how it would hurt the remainder of the company, they seem to be following now Apples approach. At Apple the OS X group works to benefit the iPod group and visa versa.

For the Sony nay sayers....Sony will do fine

[tekdroid @ Jun 17th 2007 5:14PM]

Connect Disconnected.

I assume that means that SonicStage is gone, or at least the Connect component of it will be missing in the next update.

One can only hope. Welcome to market realities, Sony.

[Woolly Mittens @ Jun 17th 2007 6:34PM]

What happens to the authentication servers? Game over for your music collection?

[Jamesology @ Jun 17th 2007 10:08PM]

OMG only 25 posts, DAMN I thought non-Sony fanboys sixth sense of anti-Sony would of gone off by now. Here let me get this thread started.

Nintendo sucks b/c they only concentrate on video games and all the other things Sony fanboys say..

Microsoft sucks b/c they are not Apple (thought I myself hate Apple) so Sony will kick their ass.

Sony will take over both companies b/c they are Sony. It has a S in it.

[Big @ Jun 17th 2007 11:54PM]

Don't forget SONY also makes military technology and is a trusted brand WORLDWIDE.

It blows my mind to see people talk badly about mega coorporations that have been around for decades.

I'm really suprised SONY doesn't make cars.

[Big @ Jun 17th 2007 11:54PM]

Don't forget SONY also makes military technology and is a trusted brand WORLDWIDE.

It blows my mind to see people talk badly about mega coorporations that have been around for decades.

I'm really suprised SONY doesn't make cars.

[Austin @ Jun 18th 2007 1:45AM]

I don't hate sony, i love some of thier products, but good heavens, connect SUCKED! They gave me 3 free songs one time, so I tried it out, only to find that you couldn't do ANYTHING with them except play them in the completly encryped connect software or use them on one of sony's players. connect sucked and it's good that they're gonna spend that money on the playstation which could kick 360 to the curb if microsuck doesn't choke it with thier monopolistic practices.

[BriFromCT @ Jun 18th 2007 1:48AM]

Sony should buy Apple. That would be a perfect fit; lots of gaps filled for Sony by Apple.
What does everyone think a Sony\Apple acquisition would look like?

[Craig @ Jun 18th 2007 11:28AM]

You all do know CONNECT is going to be re-born in the PlayStation Store, right?

Sony's not going to abandon this market. Only the CONNECT Name/Service.

I'm hoping that they keep customers purchase records and will be migrating them to whatever PlayStation Music Store, they're launching.

Perhaps E3 will tell us something.

I don't think OpenMG DRM/MagicGate & ATRAC3 need apply...

I'm fairly sure Sony is gonna learn from this and use AAC. (Though probably still DRM'ed and I wouldn't be surprised if they didn't MagicGate it.) If they use WMA, my jaw is gonna drop big time.

Though... It does seem awkward that the Mylo has Windows Media DRM 10 and the next PSP is rumored to include built-in memory, which potentially be used for subscription MSDRM, just like the Mylo does right now.

The only reason the PSP currently doesn't have MSDRM support, right now, is because Memory Sticks utilize MagicGate DRM, and not whatever security subset Secure Digital cards use. The only MS-DRM devices on the market that have flash memory expansion, utilize SD cards and nothing else... Not compact flash (no-drm) and not MMC (no-drm).

As far as I know, Windows Media DRM is only compatible with Secure Digital cards.

Sony WILL NOT drop Memory Sticks... I won't say never... But to many devices are built with it in mind, right now, including a crap-load of Sony R&D which has went into it, I'm sure.

[KC @ Jun 18th 2007 3:23AM]

Moving the Connect staff to the PS3 group? Does this mean that they will start to sell music on the PlayStation store? That would really be nice integration, and hopefully they will sell surround music which would be really awesome to have for surround systems.

[ledorky @ Jun 18th 2007 3:50AM]

Truth be told, I don't mind ATRAC at all. I like the space savings with Atrac3+
It's just the friggin' software I hate (Sonicsuckage then Connect). Sony cannot write decent software to save their lives.
I have two ATRAC capable players and I love my Sony walkman nws705 player despite the DRM (gotta love the 20+ hour playback times even on random mode).
Sony is doing fine. Bluray is doing well. PS3 not so much and I won't shed a tear if it tanks (and also the PSP).

[JeremyS @ Jun 18th 2007 11:09AM]

So I paid $160 for an 8gb Sony Network Walkman only for Sony to dump us like this. Dam it, Dam it, Dam it.

[JeremyS @ Jun 18th 2007 12:07PM]

my only saving grace is that my A1200 does play non-drm aac files. $1.29 from apple? I guess thats the cost I pay for liking sony suff.

[poseidongroove @ Jun 19th 2007 3:34AM]

Anyone that understands what Howard Stringer's evolving strategy for Sony is should be able to decipher what is happening to Connect.

Here goes.
-Convergence is the name of the game now in Games and Media Content Delivery. Apple, Sony MSSOFT are all doing it.
-Apple ties you up to their store via iTunes a Mac and Apple TV, MS via Zune and XBox Live but neither produce any content.
I think Sony is the smarter company. Think about this, Sony are releasing Internet Video Link to plug on the back of their 2007 Bravia sets which will give these TVs full internet access without a computer.
Which means, RSS is the platform to build your Electronic Programme Guide on not IPTV. It also means Sony can push all their content at you using a standard that is really begging to go mainstream. (At the moment, RSS is a meaningless acronym to Job Bloggs). Besides, computers are too cumbersome to have a place in anyones living room. Think of Joost and TVTonic as two services needing a simple platform like this.

-Connect will roll into Playstation@Network and you'll be able to get access to all of Sony's music and films in your living room via the PS3 or IVL(In IVL's case using RSS maybe Joost and TVTonic as well).
-So tell me folks whos's smarter? The company which sources content from other folks and tethers you to a computer or the one that owns it and delivers it using it's internal value chain.

If I were any of you fanboys, Sony is a buy stock right now. If you stop wearing your North American hat and think like the rest of the world as a whole you'll realise that Sony is a better bet than the other two companies in this area. Apple are actually the weakest. How many homes in Asia or Africa have ever heard of Apple?

Heck, MS and Apple always want me to use a computer with Sony I don't need one if you have a PS3 or IVL. Good job Sony, I'll be buying more shares today!! There is a paradigm shift going on and very few people actually understand it.

Then again, what fanboy knows anything beyond what he reads on a blog or what his friend told him?

[Matt @ Jul 5th 2007 5:07AM]

How about pulling the plug on PlayStation, and refocusing on your audio and video equipment? Sony has a real shot at owning the OLED market... Samsung is HOT on their heels.

[ed @ Aug 31st 2007 8:31PM]

I hope Bluray is next..