Sony Gets Music Store Off Ground, Into Crowded Field

Pop star Sheryl Crow went to unusual lengths Tuesday to help Sony Corp. launch its online music venture, performing hits in the aisle of a United Airlines jet flying from Chicago to Los Angeles.

Crow’s high-altitude gig was a fitting emblem for Connect, Sony’s ambitious entry into the online-music business: The field is as crowded as the skies over O’Hare.

Making matters more difficult for Sony, its online store offers downloadable songs that transfer seamlessly to Sony’s line of portable music players -- but no other company’s at this point. And the software needed to buy and play music from Connect can’t handle songs from any other online music outlet.

For Sony, the Connect initiative is a chance to show what it can produce when it pulls together its combination of technology, devices, entertainment and salesmanship. Company executives refer to Connect as the glue that binds not only music and machines but also disparate and occasionally uncooperative elements of the corporate family, whose products include music, movies, video games, computers, televisions and stereos.

The problem for Sony is that it’s playing catch-up to such rivals as Apple Computer Inc., Roxio Inc. and Microsoft Corp., which have more popular devices, slicker services and more robust software.

“They’re going to have to make this thing work, the Connect store,” said analyst Mike McGuire of GartnerG2, a technology research firm. “Or they’re going to have to work with the rest of the industry, but that doesn’t map to their history.”

Sony has a long history of charting its own course. That has led to hits like the Walkman and misses like the Betamax.

Not that Sony will be going it alone on Connect, which is expected to offer songs from all the major record companies and many independents from around the globe. Promoters of the service include United Airlines -- which is letting customers trade frequent-flier miles for tunes -- as well as McDonald’s and about 9,800 U.S. retailers.

Crow, who records for Sony rival Universal Music Group, said she was happy to help get Connect off the ground.

“It’s an exciting moment for all artists when someone steps up and says, ‘We’re going to do something about piracy,’ ” she said.

Jay Samit, general manager of Connect, said the service wasn’t really competing for the relatively small number of people using such outlets as Apple’s iTunes Music Store and Roxio’s Napster. Instead, he said, its main challenge was to make customers out of the tens of millions of people downloading pirated music for free.

The primary purpose of Connect isn’t to fight piracy, however -- it’s to help sell more Sony devices. In that respect it’s aping Apple, which sees its iTunes store as a way to move iPod music players.

Analysts say Sony had to build its own store because it wasn’t willing to abandon the proprietary technology that kept its devices from working with existing online services.

“They need devices to make the [Connect] service work; they need a service to make the devices work,” said analyst Josh Bernoff of Forrester Research. “It’s a pretty big gamble.”

Sony officially launched Connect on Tuesday, when Crow and sideman Tim Smith played a brief set in the economy section of a new United 777 emblazoned with the Connect logo. A video crew captured the performance on new Sony high-definition cameras as the plane passed over the Grand Canyon in Arizona, and the live songs and video should be available on Connect this month.

Connect users may get more out of the show than the listeners clustered in the plane. Crow’s battery-powered loudspeakers gave out during “My Favorite Mistake” halfway into the set, and the music all but disappeared behind the dull roar of jet engines.

Connect currently consists of a downloadable music store that can be reached only through a Sony program for playing music on a PC. In the near future, Sony says, Connect will also include online radio stations and, possibly, music videos.

New features are expected to come as new devices roll out, beginning with a more powerful MiniDisc recorder. Other possibilities include Sony’s hotly anticipated portable video game system and a hard-drive powered hand-held player.

Connect starts with a huge potential audience: People have already bought about 2.5 million portable Sony devices that will work with the service.

The company expects to sell 4.5 million more Connect-compatible devices in the U.S. by the end of the year.

“More people listen to digital music on a Sony device than any other portable device,” Samit said.

That may be true, but the hottest portable player today is Apple’s iPod. Ross Rubin, an analyst at NPD Techworld, says that Sony sells the largest number of digital music players, but that Apple grabs the biggest share of the dollars -- more than 50% and growing.

Sony has no match yet for the high-capacity iPods, whose built-in hard drives hold at least 250 hours of music. But it hopes to gain a foothold in that market next month with a line of more powerful mini-disc players. Although each “Hi-MD” has only one-fourth the capacity of an iPod Mini, Apple’s least expensive player, the $7 Hi-MD discs are rewritable and removable.

How well those devices work with the Connect software will be crucial to Sony’s success in the field.

“They have only one bar to live up to, and that is what people have experienced with the iPod,” McGuire said.

The Connect music store is much like others in several key respects, selling tunes at similar prices and with the same limits on copying. But while Sony focused on covering the basics with the first version of the store, more experienced rivals like Apple, Napster and MusicMatch Inc.’s MusicMatch Downloads have moved on to more full-featured offerings.

Perhaps the biggest challenge for Sony will be persuading the public to embrace another anti-piracy technology that doesn’t work with rivals’ approaches. The market already has at least three: Apple’s FairPlay, which works only with iPods; Microsoft’s Windows Media, which Roxio’s Napster and most other online music outlets employ; and RealNetworks Inc.’s Helix, which Real uses at its downloadable-music store.

Music fans may be daunted by the prospect of burning CDs that work on their Sony Walkman but not on the Philips CD player in their living rooms, McGuire said. But the problem isn’t unique to Sony, he said, adding that the digital format war threatens to leave consumers with “a bunch of islands of music” in their homes.