Market Insight

Sony brings A la carte to PlayStation Vue

June 29, 2015  | Subscribers Only


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Sony’s three month old online pay TV service, PlayStation Vue, will begin offering a limited a la carte offering in July. 

Three individual channels will become available for subscription on a monthly basis, with out the need of a TV bundle from PlayStation Vue: 
•    Showtime priced at $10.99 per month ;
•    Fox Soccer Channel for $14.99 per month;
•    Machinima (an online gaming and video entertainment channel) for $3.99 per month.

Sony hinted that more channels will be added on an a la carte basis in the future. In addition, PlayStation Plus members will see a $2 per month discount to a channel’s subscription price.

PlayStation Vue launched in March in three markets (Philadelphia, Chicago, and New York City) and is now also available in San Francisco and Los Angeles.

Our analysis

The move to offer the three services on an a la carte basis isn't a game changer for Sony, with Fox Soccer being unpopular with pay TV consumer and Machinima being completely untested in this space despite having 12.5m on YouTube ‘subscribers’ (i.e. users who follow the channel, but do not pay to access it). For CBS owned Showtime, the decision fits in with its larger strategy as it attempts to respond to demands for greater consumer choice and gain entry into cord-never homes. Showtime recently announced its plans to launch an OTT  SVoD service similar to HBO Now. Unlike HBO Now Showtime's OTT service will carry live linear East and West coast feeds. 

IHS believes that by offering channels on an a la carte basis Sony may be able to capitalize on the uncertain demands of newly forming households. With slimmed down channel bundles being seen as increasingly desirable to consumers, operators are attempting to secure unbundled carriage rights to specific channels. However, while cable networks are aware of the need to adapt to a changing market, once popular channels are unbundled, their underperforming siblings would be at risk.

It is unlikely that Sony will secure carriage rights that would enable it to sell access to individual cable networks like TNT or USA in the near future. Sony, along with the rest of the pay TV industry, is awaiting a decision in ESPN lawsuit with Verizon, which if unsuccessful would allow pay TV distributors to offer skinny bundles under its existing agreements with cable networks.

Geography
USA
Organization
PlayStation Showtime Sony
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