According to Variety, Sony is currently in active negotiations with at least two content companies about licensing their channels. These talks are "far beyond exploratory," and reportedly on the same level as Intel who is also looking to become a virtual MSO (multiple system operator). Naturally Sony has refused to comment on "rumor and speculation".
Sources claim the service will be a package of linear channels similar to what pay-TV distributors offer nationwide, delivered via a broadband connection. But unlike cable operators who have physical boundaries enforced by the government, a virtual MSO can offer its services to any consumer nationwide.
Launching a television service could be a potential problem for Sony. Investors are still waiting for a return of stability to Sony with Kazuo Hirai now at the helm. After Howard Stringer stepped down as CEO back in April 2012, stock dropped to the low teens. Hirai has even come under fire for spending almost $2 billion on acquisitions outside its core business. Establishing a TV infrastructure along with content licensing could cost billions of dollars.
Currently it's unclear how this TV service will be distributed, but it's assumed that Sony's PlayStation 3, Bravia TV sets and Blue-ray players will serve as receivers. Whether the service will be offered outside Sony hardware is unknown at this point, but the company may be shooting for something akin to Microsoft's own upcoming streaming TV package slated for the Xbox 360 console, and Apple's rumored Siri-powered iTV.
Another potential opponent would be Google Fiber which currently only resides in Kansas City. At the rate of Google's Gigabit Internet rollout, it may be years before this service becomes a viable threat, but the low cost of Google Fiber should be enough of a threat to keep it on the radar: Gigabit Internet plus TV for $120 per month. The full list of channels is here, and there are also options for Starz and Showtime pay-channel packages as well.
Sources claim cost will be a big issue with Sony, as the company will be required to pay more to license channels because it doesn't have an existing subscriber base. Internet providers faced the same steep licensing pricing about ten years ago for the right to compete with cable operators and satellite TV providers. This financial roadblock may force Sony to initially offer a less comprehensive channel package than competitors until it generates additional revenue from subscribers.
Sony reportedly had plans to become a virtual MSO before, but those plans were put on hold after discovering that Comcast would authorize the streaming of its TV service to the Xbox 360 app and not apply the usage against the subscriber's data cap. Since then talk about Sony's TV plans stifled until reports began to surface about Intel's own virtual MSO efforts.
With E3 3013 just six months away, it's likely that talk of Sony's streaming TV service may be related to the possible reveal of the PlayStation 4 console. Microsoft is also expected to reveal its Xbox Infinity console during the same show which will serve as a platform for Microsoft's own TV streaming service. That said, talk of Sony's efforts at this point in time just doesn't seem coincidental.