Sony takes a new angle on PSP movies 

Game maker licenses content, lowers prices

By Susanne Ault -- Video Business, 8/15/2008

AUG. 15 | Sony Computer Entertainment is taking another stab at establishing the PlayStation Portable as a film viewing device, by lowering title prices, signing studio deals to license content and making digital copies playable on the handheld system.

When the PSP launched in 2005, all of the major studios were churning out films in the portable console’s Universal Media Disc format. However, games ultimately proved to be far better sellers on PSP, and nearly all the major studios stopped generating UMDs after about one and half years of production. Sony Pictures Home Entertainment was the exception.

Although the new release pipeline substantially dried up, PSP owners were still accessing films. But they were mostly doing so illegally, transferring ripped Web files to their systems. At the same time, studios cannot ignore the PSP’s 13 million U.S. hardware base as the DVD market matures.

“We want to provide a legal offering from the studios, … and it’s an easier conversation to have with them now,” said John Koller, director of hardware marketing at Sony Computer Entertainment America. “There’s a lot of positive momentum with the PSP.”

To make sure consumers buy UMDs this go around, Sony is shaving new release list prices to $9.99 to $14.99. That is $10 to $25 less than UMD initial pricing a few years ago.

To attract studios, Sony Computer is promising to do the bulk of the work with UMDs. Sony will license, manufacture, distribute, market and sell the studios’ films for them for the PSP.

MTV was the first supplier to agree to these terms, which resulted in the bow earlier this year of nine UMDs, spanning seasons of such shows as Viva La Bam and Jackass. A second wave of MTV UMDs should street by the end of the year. Additional studios are expected to announce UMD licensing deals with Sony in the next several months, added Koller.

Sony’s goal is to distribute five to seven studio-licensed UMDs each quarter, not including movies from its sister studio.

Koller said Sony is pleased with MTV UMD sales, believing consumers are drawn in “because it’s getting close to an impulse purchase” in price.

Additionally, Sony wants to release titles that narrowly appeal to young men, who make up 92% of PSP owners. Its core demographic is the 15- to 17-year-old male teen.

“The biggest issue with UMD was the lack of creating for a targeted demo,” said Koller. “When we first launched, it was a difficult sale. I don’t think it’s a big stretch to say that a 16-year-old doesn’t have a lot of discretionary income. … We were offering UMDs that were more expensive than DVDs at the time. And we want content that is in line with what the demo is asking for, action and comedy … not romantic dramas.”

SPHE, for instance, has set Prom Night and Don’t Mess With the Zohan to bow on UMD on Aug. 19 and Oct. 7, respectively.

Best-selling UMDs to date include New Line Home Entertainment’s Wedding Crashers and Sony’s Superbad.

To further enhance PSP’s film capabilities, Sony is courting studios to make DVD digital copies compatible with the handheld system. Today, Sony’s DVD unit is the only studio embedding copies for PSP playback.

“The studios are looking at this and saying, what are the myriad of ways that content can reach all of the various consumer touch points?” said Koller. “They want to grow that consumer base that they have.”

At least one studio source indicates they are eager to make its digital copies compatible with PSP so as to prevent Apple from creating a monopoly with its portable media. There is a fear that Apple might grow to be the digital version of Wal-Mart, exerting the same power with studios over downloading/streaming as the bricks-and-mortar chain does with DVD.

Koller is especially confident that studios will sign on to UMD and digital copy because of their recent support of the PlayStation 3 download and streaming service. Since July, most studios have been offering digital film sales and rentals that people can transfer from their PS3 to their PSP. People also can order content directly from PCs at www.store.playstation.com and transfer to a PSP through a USB cable.

Also, Sony licensed Walt Disney Studios Home Entertainment’s National Treasure 2: Book of Secrets for a customized hardware/software bundle streeting in October. This UMD will only be available in this bundle, priced at $199, and won’t be sold separately.

“The future of PSP is bright for video because of all the different methods consumers have to enjoy it,” Koller said.

Jennifer Netherby contributed