Executive Leads Sony on Digital Tightrope

In the debate over online piracy and consumer rights, Sony Corp. has a unique vantage point.

Not only does it own a major Hollywood studio and record company, but it also builds computers, CD burners, DVD recorders and portable media players that millions of consumers use to make unauthorized copies of movies and music.

As a result, the Tokyo company aims to strike a delicate balance: to protect copyrights while building gear that lets consumers use digital media more freely. To that end, Sony is forging ahead with a new generation of devices designed to connect to the Internet and to one another, allowing users to move digitized music, movies and information around a personal network with great ease.

Kunitake Ando, Sony’s president and chief operating officer, is optimistic that the differences between content creators and device makers will be resolved in the marketplace. He is expected to reveal more about his vision for this new digital era in a keynote speech at next month’s International Consumer Electronics Show in Las Vegas. In the meantime, he spoke with The Times about networking, copy protection and other hot topics via videoconference from Sony’s headquarters in Japan.

Question: How do you strike a balance between the needs of the content community and the needs of consumer electronics manufacturers?

Answer: Some people think consumer electronics and content, like [motion] pictures or music, go different ways. But I don’t think so, because hardware needs content in order to make a usable, attractive product, and [vice versa].

In the network age, without network-connected hardware, I don’t think the music industry will survive, and [motion] pictures are the same. It may seem that they’re looking in a different direction only because they try to protect their own rights. They want to have strong copy protection.

Q: How will consumers react to copy protection?

A: We need a little bit more advancement from technology, but from the users’ viewpoint, I don’t think it’s a good thing to get everything free on the Internet. Of course, there is a certain balance between usability and price and the ease of use and so forth. Right now, we are in the transition period. If you want to really develop a good content industry, we need certain protection, and the same thing for the consumer electronics industry.

Sony is in an advantageous position because, since we have both industries, we can really talk and discuss with each other within the group. In fact, we have a committee we call Contents and Technology, [where we] frequently discuss the benefit for both industries. So I think when we introduce new types of products, we are trying to be always ahead.

Q: Do you think the Sony Music side of the company has done enough to let consumers -- and particularly Sony Vaio owners -- do what they say they want to do with digital music?

A: Record label companies’ whole model has been sort of collapsed or broken. Package media sales are now decreasing instead of increasing. So it’s very clear that we have to change the way we do business in the music industry because they’re probably hard-hit from the network age. In that sense, I think the music label has to move faster.

As Steve Jobs of Apple [Computer Inc.] said, nobody wants to steal anything -- if there’s a reasonable way [to buy it] and the price is [fair]. The music in- dustry has not caught up fast enough with the demands of the users. I think that once it settles, we’ll be OK.

Q: Are you providing a way for your devices to communicate with one another?

A: That’s our direction. We are now introducing many products which will all be connected with each other. We introduced last September the new device that we call RoomLink, which connects a Vaio PC and Wega TV. And we introduced a new product called Cocoon, which connects with a TV but is directly connected to broadband [a high-speed Internet connection]. This Cocoon machine will actually evolve depending on the user’s habits and taste and so forth.

Q: It sounds as if it’s designed to be a storage network for the whole home. Is that correct?

A: Right, with a hard disk drive and Linux operating system. I think we are going to continue to introduce many of these networkable devices, all connected seamlessly. We are going to connect all our consumer electronics products under one platform instead of just introducing all those stand-alone type of products. That’s basically our strategy, so that our platform products connect easily to an Internet service as well as the content the user feels like using.

Q: How do you get the rest of the consumer electronics world to connect their devices to the Sony platform?

A: We are ready to discuss [the platform] with any consumer electronics company to make it an open standard. We aren’t going to make it closed only to Sony, because unless users can easily connect our products to all other electronic companies’, it’s not so convenient. We don’t want to really stick to a propriety type of standard format or even media technology.

Q: Is there a risk that lawmakers, particularly those in Washington, might overreact and mandate certain technologies for content protection? Could that hurt your ability to compete and develop products?

A: Truthfully, I’m rather optimistic because both industries need each other. Right now, of course, there are sometimes heated discussions. The Consumer Electronics Assn. is saying very extreme things and the Motion Picture Assn. of America is saying [extreme things in] the other direction. It’s a really tough issue, but I think both industries will find a comfortable manner, so I’m not so worried.

Q: Much of the content industry has adopted Microsoft Corp.’s Windows Media audio and video formats and its digital rights management software to protect their content. How do you feel about those technologies?

A: All of our consumer electronics products will not necessarily adopt Windows Media audio and video. It’s necessary for the PC but not all the consumer electronics products.

We are going to have our own media technology. We should have our own DRM [digital rights management] and our own [digital media formats] and also media players as well. People should have a choice.

Initially, when we introduced [music players designed to resist piracy], user ability was so bad, nobody wanted to use them. That’s why people [would] rather rip [CDs] or download [songs] from the Net.

But I think technology has advanced quite a bit since then. It’s much easier. So I think consumers will also get used to paying a certain price for the content they get. It may take some time, but it will be OK.