Problems with an aggressive copy protection program attached to several CDs from Sony BMG Music Entertainment reflect the difficulties balancing the needs of artists and consumers, said Sony Corp chairman and CEO, Sir Howard Stringer.
"Clearly the perception out there is that we shouldn't be doing too much of that copy protection stuff," Stringer said on Thursday at a news conference at the annual Consumer Electronics Show.
Sony BMG, a joint venture of Sony and Bertelsmann AG, was sued last year after 5.7 million of its CDs were shipped with anti-piracy technology that required a new software patch to plug a potential security breach in computers used to play the CDs.
Stringer said the experience highlights the conflict at Sony between the electronics division that wants to make products with features consumers want, such as the ability to copy music and films to devices, and the creative units of the company concerned with protecting copyrights.
"In the video business moving on, this is going to be something of a tug of war for the reasons that protecting the artists' right is not something that should be automatically dismissed by the push-and-pull generation," Stringer said.
"We'll just have to tread very, very carefully," he said. "We have to walk the line at Sony between the needs of technology and the consumer, and the rights of the artist, which we feel very strongly about."
Stringer said that a reorganization effort at Sony continues, with emphasis on ending the current scattershot approach to promoting a myriad of products.
He said that the company would carefully select a small number of "championship products" as the focus of promotional efforts.
"Sony has been an electronic democracy where everything gets equal weight and decisions are very hard to make," he said.
Earlier in the day, Stringer highlighted Sony's upcoming product line, which includes an electronic book reader, a device that allows TV shows to be streamed live to a PlayStation Portable handheld unit, and a new digital movie projector.
Streamlining management and products are key to competing with companies such as Apple Computer Inc, whose iPod has eclipsed the lead Sony once had in portable music devices.
"Apple's market capitalization is US$50 billion based on a handful [of products]," Stringer said. "We have thousands and our market cap is less than that. Is there a message in there? Can't we just keep it simpler?"
Stringer said the company was doing a brand study and would also remake its scattered and often forgettable advertising campaign.
He said his efforts at cutting costs and reorganizing the company around several core units is progressing slowly but steadily.
Company executives will meet next week in Hawaii to assess the restructuring. The company is planning to cut 10,000 jobs.
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