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Friday, December 26, 2014

Sony slips into history

Admittedly this subject is beyond the usual scope of this blog but I've long had a fascination with corporate dissonance. Economist are forever pointing to examples of Joseph A. Schumpeter's creative destruction as the old is brutally demolished to make way for the new. The implosion of the US steel industry would be a text book example. Thousands of jobs and billions of dollars disappeared over the course of months but most firms do not die heroic deaths but rather aimlessly wonder history's back roads in a protracted dotage. GE and IBM are examples of the living dead who have lost their ways and reasons for existence. The lions have lost their teeth and survive on the wealth accumulated by prior generations. They are perpetually "re-creating" themselves as if only they could find the perfect platitude they would once again be virile and relevant.
Some stood on the apex of greatness for a full century such as Sears of Sears Roebuck. It brought the essentials and amenities of civilization to rural America and became a part of Americana and just when it could have assured its market dominance for another half century fumbled away its destiny. Consider it was only a few years after Sears deemed the mail order business to be obsolete that Jeff Bezos founded Amazon. Had Sears had the foresight to replace their catalogue with a website it would have been the bull of e-commerce but now seems destined to follow Railway Express into memory.
In the wake of the hacking scandal it seems that Sony has stumbled upon the mother lode of bad ideas. Michael Lynton and Amy Pascal, the Tweedle-dee and Tweedle-dum of Sony Pictures, are the personifications of the Peter Principle. The have been promoted to the level of incompetence; the cream rises until it sours. As bad as those two actors may be they are but symptomatic of Sony's decline. Sony was supplanted by Apple in consumer electronics and Samsung seems destined to supplant Apple.
The redoubtable Sony Trinitron was once the gold standard of televisions. The superior picture quality was perceptible when viewed next to the competition. So how does Sony fight Samsung in the new smart TV market? It surrenders. From CNBC;
Sony and Samsung just struck a deal that will bring Sony's PlayStation Now streaming service to select Samsung Smart TVs in 2015, The Verge reported. The deal was made official Wednesday morning after the release of a joint statement.
PlayStation Now enables users to play video games from Sony's previous flagship gaming console, the PlayStation 3, on its current flagship model, the PlayStation 4. With this deal, Sony will be able to offer its video game-streaming service to consumers without forcing them to buy the console.
What is this? Corporate assisted suicide? Jack Kevorkian call your office. Did not anyone at Sony think to install PlayStation on the Trinitron? Where do they go from here? They'll probably plan a hostile take over of Kmart.


  1. What bugs me is interesting startups like Uber, AirBNB and Lyft are being squished by the archaic dinosaurs that want to keep the pie smaller than it needs to be. Gosh, it's like innovation has cooties or something, yet you've got places like Sears who simply ignore what's happening in the world around them. The USPS is adapting, at least, but still inefficient and poor with regard to their delivery of services.

  2. What gets me is the boneheaded decisions managements make. I can understand that Sony would not want to undercut its PlayStation sales by putting the games on its smart TVs but putting them on its competitor's TVs is positively imbecile. People will buy a Samsung smart TV instead of a PlayStation or a Trinitron. IBM got into the PC business and even went so far as to write its own operating system, OS 2 Warp, and then got out, got in again and then out again. Some managements are just scatter brained. Of course in the private sector the shareholder pay a price for the stupidity and what business a company loses is usually captured by its competition so the economy as a whole is no worse off.

    As a matter of fact I may buy a Samsung as soon as the PlayStation games are available. A few months ago lightning took out both of our TVs. We had one repaired but the second one was too cheap to warrant repairing and it has never got replaced. While we were waiting for cable to be restored I bought a Roku. Pirate Bay has more movies than Netflix and they can be downloaded and streamed from my PC to my television via Roku.