Sony Launches $699 4K Media Server to Support Content Store Due to Launch in Fall

Sony is taking a demographic approach to distribution as it seeds the market with Ultra HD 4K TV, Executive Vice President Michael Fasulo told Consumer Electronics Daily. As the company introduces 4K to stores -- currently some 1,600 in select digital marketing areas (DMAs) -- it’s looking at ZIP codes where consumers have paid more than $2,500 for TVs rather than targeting a certain size store or chain, he said. “We didn’t look at retailer X across the nation or retailer Y in a geographic area,” he said. Instead, the company used data from CEA, NPD and its own point-of-sale information to determine where “the consumer that has the highest propensity to buy this type of experience lives” and then located Sony retailers in those neighborhoods to launch the new TVs, he said. “We looked at this from a consumer-in perspective, not a product-out perspective,” Fasulo said. The list condensed to 12 DMAs, which he declined to break out.

In response to our question on specialty dealer reaction to the distribution strategy, Fasulo said if the company had told dealers of the plan by email, “they probably would have responded violently.” Fasulo “personally spoke to each retailer” and explained what Sony is calling its “market creation” approach. “It’s not how many units can we sell over a period of time,” he said. “We're really creating a new market and Sony’s leading the way.” Ultra HD is different from anything on the market, “and seeing is believing,” he said. When Sony executives outlined the strategy to dealers, “they embraced it,” he said, saying he received little resistance “because it was grounded in logic.” The company plans to expand distribution by year-end, “but not by much,” he said. He expects to end the year with roughly 2,000 storefronts showcasing Ultra HD. Sony is banking on its ecosystem to position the company as the Ultra HD leader, Fasulo said.

The company has announced a new media server and a companion online rental/purchase store that will go live this fall, giving consumers access to 4K content that the fledgling format desperately needs. Consumers who buy a Sony Ultra HD TV will get a voucher for $200 off the $699 4K Media Player that will begin shipping Wednesday and comes pre-loaded with 10 titles: The Amazing Spider-Man, Bad Teacher, The Karate Kid, The Other Guys, Battle: Los Angeles, That’s My Boy, Salt, Total Recall 2012, Taxi Driver and The Bridge on the River Kwai. Rentals on the site will start at $7.99 for 24 hours, and purchases will start at $29.99, Sony said.

Consumers who were given a media server with the purchase of an 84-inch Sony Ultra HD TV will be able to swap out the first-gen server, which isn’t compatible with the upcoming Video Unlimited 4K service from Sony, Fasulo said. Consumers who have bought a Sony Ultra HD set are entitled to a $200 discount off the price of the server, he said. He wouldn’t disclose what in the new box makes it compatible with the service.

Sony has also launched its Mastered in 4K Blu-ray disc series including Total Recall, Ghostbusters, Battle: Los Angeles, The Karate Kid, Taxi Driver, Angels & Demons, Glory, The Other Guys and The Amazing Spider-Man. Sony Pictures continues to master more titles in 4K, Fasulo said. Buyers of Sony’s 55-inch and 65-inch Ultra HD TVs get three free 4K Blu-ray titles that the company says have been optimized for 4K. Fasulo wasn’t sure whether consumers can choose the discs from a list or are given particular ones. He wants consumers to buy the $699 server. Once they've bought an Ultra HD TV, “at that point they should buy into a server,” he said. He wasn’t aware of any update on a Blu-ray standard for 4K from the Blu-ray Disc Association.

Fasulo noted that reviews of Ultra HD TVs are “starting to pick up,” in response to our observation several weeks ago that there were no reviews of Ultra HD TVs at hhgregg.com despite the availability of sets in certain markets (CED June 24 p1). There were still no reviews of the Sony 55- and 65-inch models at hhgregg on Tuesday, but as Fasulo pointed out to us, there were four reviews of the 55-inch XBR-55X900A and five reviews of the 65-inch model. Both products received five stars.

Product search remains an issue for an industry whose overuse of the term “ultra” is now confusing the search engine hunts for Ultra HD. At hhgregg, a search for “Ultra HD” brought up a Roku HD Streamer followed by Sony, Toshiba and JVC HD camcorders and an Epson projector. In a department listing at hhgregg, Ultra HD was wedged between computer accessories and kitchen appliances. Even at the Sony site, several HD projectors appeared on a page following a search for Ultra HD.

Fasulo said CEA may not have done thorough research when it decided on the Ultra HD name for the next-gen TV resolution. “We continue to use 4K because it’s our 4K ecosystem that’s a differentiator,” he said. Sony is including the 4K along with Ultra HD to stand out in the search environment, he said.

On the effect low-price competitors might have on the market, Fasulo hopes the industry takes advantage of the technology because there are “so many positives” for the consumer. He doesn’t have a take yet on the pricing situation but cautioned that “those that are bringing inferior product” or “not the true experience” of Ultra HD to market are “irresponsible.” Ultra HD brings “so much value to the consumer that it will make it great for all of us.”