TDG: Sony PlayStation Vue is 'dead on arrival'

DetailsMichelle Clancy | 25 March 2015

Sony's new over-the-top (OTT) service, PlayStation Vue launched last week in three US cities but at least one analyst says the service is dead on arrival.

Sony's streaming video service is available for PlayStation 3 and 4 users in New York, Chicago, and Philadelphia, offering a variety of broadcast and cable channels in three different tiers at prices ranging from $49.99 to $69.99 per month.

"By all reports, the service has a very slick UI and includes a 28-day cloud DVR feature (which is sorely lacking in the DISH's Sling TV service)," said Joel Espelien, senior advisor at TDG Research. "Chutzpah and pretty graphics, however, do not by themselves make a successful pay-TV service. Unfortunately, I think PlayStation Vue is dead on arrival."

He said that this is due to two factors: the cost-value equation, and the fact that the service isn't multiscreen. Taken together, the analyst calls Vue "a strange case of interesting technology and well-intending project managers being crippled by the company's abject failure to recognise who their customer is and what they might want from a TV service".

According to TDG research, 53% of US broadband households use a game console but the users skew young: 74% among 18-24s and 68% among 25-34s. More relevant for Sony, collectively PS3s or PS4s were used by 54% of 18-24s and 56% of 25-34s. Users are also heavily male.

So what matters to a young, male audience? Strong value (lots of content and features for a great price); personalised screens (young male gamers view a lot of video on PCs, tablets and smartphones); and live sports, particularly ESPN none of which are offered by Vue.

Looking at cost, Espelian said: "In 2013, the median income of 25-34s was approximately $31K, roughly the same level it was in 1995. Younger millennials, of course, earn even less. In this context, Vue's $50-$70 per month price point, which is actually more expensive than many entry-level packages from legacy pay-TV providers, is simply inexplicable. As I have pointed out previously, Sling TV's $20 price point seems revolutionary by comparison."

And when it comes to multiscreen access, Sony has referenced a future iPad app, but Espelian noted that the launch announcement included no discussion of smartphones and ignored Android and the PC completely.

"A service focused solely on a single living room device (be it a traditional STB or a game console) is totally out of step with today's quantum consumer," he said.