Sony PlayStation Offers Unique Vue for Cord Cutters

Sony’s PlayStation is expanding its horizons and the service for its cloud-based TV service called Vue. Owners of the newer PlayStation 4 and older PS 3 consoles in Los Angeles and San Francisco can now sign up for the service which features 85 different cable channels in three different pricing tiers.

There are plans to roll this out nationwide, but Sony (NYSE:SNE) executives say they are starting in larger markets with big PlayStation fanbases.

Dwayne Benefield, head of PlayStation Vue, says, “We needed local programming. No one had delivered local programming and live TV over the internet in the United States like this ever before. It was a large task.”

While streaming services from Amazon.com (NASDAQ:AMZN), Hulu, and Netflix (NASDAQ:NFLX) are becoming more ubiquitous on gaming consoles and other devices, Benefield believes the local angle will win over the household, not just the family gamer. “Yes, they’re hard-core gamers, but they also want to watch videos when they lean back and relax. Is there an opportunity for us to bring in the rest of the family? Yes.”

The Vue is also now available on an app for iPad—although currently you need a PlayStation to sync with the iPad. And there’s no stream limitation—meaning you can start a video on the PS4 and someone else can watch a different program on the iPad. But if you start a show on your iPad, you can pause it and then start from that spot on a PS 4 or other compatible device. PlayStation execs say they’re considering other devices but aren’t ready to discuss further.

"In my opinion the audience is really the young adult type who is a gamer and may want to be a cord cutter probably because they are somewhat mobile," David Cole from DFC Intelligence said.

Vue launched in New York, Chicago, and Philadelphia earlier this year. Sony officials say the service will also feature Showtime’s new standalone service when it launches next month, that stream will have a separate charge.

The announcement comes ahead of Sony PlayStation’s big showcase tonight at the Electronic Entertainment Expo (E3) in Los Angeles.

Vue is aimed at helping driving sales of Sony’s new generation PS4 console as well as generating recurring revenue streams from loyal users. PS 4 and rival Xbox One from Microsoft (NASDAQ:MSFT) use exclusive gaming and video streaming content as bragging rights and enticements to consumers to boost sales of the gaming machines. While gamers and others may like the idea of cutting the cable cord, the Vue is not inexpensive.

The three tiers start at $49.99 for 50 channels including local broadcasters (except for ABC), $59.99 adds regional sports networks (no SportsNet LA for Dodgers fans, though), and $69.99 for the Elite package which features lifestyle, music, and family channels.

But Cole, the analyst, is skeptical that the service will sell many consoles on its own."I don't see it as a game changer but mainly a nice bonus feature for core gamers on a budget."

Vue allows for unlimited recording of shows in the cloud, so there’s no physical memory to fill-up like on a DVR. The catch, much of the content has a 28-day shelf life. Benefield said a month was the sweet spot when asking gamers how far back they’d want to watch programs. There’s currently no way to archive programs, although Sony says the past three days of  “popular programming” is available to watch without recording. Major live programs, especially sports, may be tricky to start over or run back if you forgot to record the event due to look-back rights.

Benefield smiles when discussing the early returns. “The existing {cable channel} partners are very happy with us,” the PlayStation exec says, “The engagement levels with the {Vue} service are far in excess of what we could ever have expected.” He says customers are spending more than five hours a day watching TV on Vue.