(continued from previous page)
What are the implications for IPTV for broadcasters? Is it going to spell trouble for them?
Stringer: That's very hard to say. Content is coming to you in every different direction in every different device. All devices with Wi-Fi can deliver content of one kind or another. The customer has to decide first what's convenient. We have to respect the integrity of copyright because we own a lot of copyright. We also have our brothers at our studios to figure out how to use the content most successfully. All we are really demonstrating is that we are no longer behind the curve; we are ahead. I think you have to keep enhancing technology to stay ahead.
All we are really demonstrating is that we are no longer behind the curve; we are ahead. I think you have to keep enhancing technology to stay ahead.
The movie theater has to change to be attractive to the baby boomers and middle-aged customers. Young kids will probably always go dating in the movie theater. This year, the box office in the United States went up, so there's still demand for the movie experience.
What do you think of the LG combo Blu-ray HD DVD player?
Stringer: It's an expensive way of showing universal discs. The three biggest box-office winners of this year were, in order: Sony, Disney and Fox. Those are the three Blu-ray players. When you consider that those three successful studios will be delivering last year's successful box office in home video this year, then that's an enormous advantage. The fourth is Warner, and they release in both formats, so it doesn't hurt. If you are going to be buying discs, you are going to be buying an awful lot of Blu-ray discs going forward -- if you want Pirates of the Caribbean or James Bond or Da Vinci Code or Spider-Man. Universal is the only one with HD DVD. I don't feel terribly intimidated.
How far in the future are OLED TVs for Sony?
Glasgow: OLEDs are being produced right now in very small sizes. I think we'll probably be doing something in the next year.
Stringer: You really need to look at it because it is one of the few products that stops you in your tracks. It's so breathtakingly bright and clear and original and microscopically thin. Strangers stop in the street, stop by the booth (at CES) all the time to look at it.
But do you think by next year you can reach a level of price compared to other TVs?
Stringer: I think that's the issue. We showed it to you because we want to show you the promise. The reality is connected to price and availability and mass production because it's also a quite complex technology. But it is so beautiful we want people to see it. Excitement comes first, you know.
What's the situation with LCD TV prices?
Glasgow: The best answer I can give you is that it's going to remain very challenging. We were able to compete over this holiday season effectively in LCD and not get into financial trouble and maintain No. 1 market share (in the U.S.) in both dollars and in units. So we're just going to have to continue to come up with new systems and new ways of driving costs down.
We're going into a generation eight fab at the end of this coming year. That will give us tremendous economies going forward. Those are huge investments. Not many companies are doing that.
When does it open?
Glasgow: It's been announced for September-October. It takes a couple of months for them to really ramp up production, and it's a joint venture with Samsung.
We've actually had increasing ASPs (average selling prices) in LCD year to year, because we're selling the highest screen sizes. We're not going after the lowest price points or the lowest possible size in LCD. We're trying to add the features to make it optimal for consumers. So we have a chance to be considerably better off financially by being that way.
Could you give us an update on the Sony Reader?
Stringer: We are very happy with it. It's selling as fast as we can make it. We're not making enough. We've been very cautious in launching it because, as you know, it failed in Japan two years ago. This is a totally different version with totally different economics and software, and we understand that Amazon is also coming on with something in the relatively short term. So, we need to get a second reader out. We probably need a Wi-Fi component.
But we're very pleased that the acceptance from the consumer is unusually strong. I don't want to be a salesman, but people love the device. How many ultimately can be sold is a question mark. I think the next iteration will be the educational marketplace. We've sent some to England. I haven't heard back from the English publishers that I've sent them to, but clearly there is a component in the English-speaking world where you can stack so much educational content that kids can take (the entire content of) their whole (collection of) textbooks (in their Sony Reader).
We didn't go there (into education) at first because there was a lot of caution. A lot of my contemporaries in Japan weren't sure about this. This has been a peculiarly American dynamic. We're well aware of the potential publishing costs and paper costs, and it has a unique ecological advantage.