Evil_Muska don’t get pissed off… It just that I got something cool to show and this is the perfect thread to post what I found…
The Customer is God
By: Eric Peterson
As the old Japanese saying goes, “The customer is God.” It's a cornerstone of the ideology that enabled Japanese manufacturers to excel in everything from automobiles to personal electronics.
So when did Sony decide they were so big that they could decide what the customer wanted?
Sony, the same company that found such success with the Walkman in the 1980s by taking an accepted format introduced by someone else (Philips) and making it ubiquitous and stylish today finds themselves trailing behind Apple as a result of their Network Walkman clinging to both proprietary music formats and proprietary software until October of 2004.
While Sony MP3 players now accept standard digital music formats, and they are trying to compete with Apple, it was only after years of trying to force a proprietary format on consumers for their own benefit. This is but one example of Sony finding themselves in a tough situation after forcing unwanted constraints on the consumer.
There may be no better example of Sony's willingness to put their own interests ahead of the consumer than the Sony root kit fiasco that occurred in November of last year.
In 2000, Sony Pictures Entertainment US senior VP Steve Heckler stated that Sony would “aggressively pursue” strategies to control their intellectual property, declaring that Sony would not allow piracy to cause them to lose “revenue stream[s], no matter what...Sony is going to take aggressive steps to stop this. We will develop technology that transcends the individual user.”
And they did.
In October of 2005, a root kit was discovered on Sony music CDs by Mark Russinovich. The root kit installed itself on any computer the disk was installed in, without the permission or knowledge of the computer user. The root kit was intended to protect Sony's music by only allowing the customer to listen to Sony's music on a PC with a proprietary player and only allowing three copies of a song to be made. Not only was the root kit impossible for the average user to detect, let alone uninstall, but in November it would come to light that the root kit opened several undetectable security holes in the user's system, drained system resources, and also sent user data, such as when a specific CD is played on each PC, to Sony servers.
Within weeks of it's discovery, it was estimated that millions of consumer PCs were infected, and lawsuits began. Sony released an “uninstall tool” which did not actually uninstall the root kit, and Thomas Hesse, President of Sony BMG's global digital business division, publicly stated, "Most people, I think, don't even know what a rootkit is, so why should they care about it?" By the end of November, Sony released another uninstall tool that actually removed the root kit, major anti-virus companies, such as Symantec, added the root kit to the list of files their anti-virus software protected against, Wired magazine published an article titled “Boycott Sony”, and class action suits were filed in several states again Sony.
While the +50 CD titles with root kit software included were recalled, and a proper uninstaller was eventually released, it is the lack of respect for the consumer, their privacy, and acting in their best interest that is most startling.
In recent years, Sony seems to have shown more interest in developing and securing format adoption for the sake of royalties than selling high quality products to customers. BetaMax, MiniDisc, MemoryStick, MemoryStick Duo, Micro MV, UMD, Blu-Ray, Atrac and BBeB are just some of the formats Sony has championed.
Sony's interest in establishing Blu-ray as a successful format is not be evident anywhere as much as Sony's upcoming PlayStation 3. After over a decade of dominance in home video game systems, Sony has put that profitability at risk by incorporating a Blu-ray as standard in the PlayStation 3. Not only are Blu-ray drives and disks substantially more expensive than DVD, but the data transfer rate of current Blu-Ray disk drives is below that of current DVD drives. The Blu-ray components have also contributed to postponing the launch of the PlayStation 3 from spring of 2006 to November, and cutting the number of launch units to 480,000; less than one third of what was offered by Microsoft for the Xbox 360. While this makes Blu-ray a questionable addition to a gaming console, Kazuo Hirai, the president of Sony Computer Entertainment America has publicly said, “[The PlayStation 3] has gaming at its core, but it's not a gaming device. It's an entertainment device.”
Microsoft's Xbox 360, the PlayStation 3's main competition, is being sold for $299 and $399 for a basic and deluxe model, and Microsoft continues to take a loss on each unit sold due to production costs. While Sony is also expected to take a loss on each new console they sell, their basic and deluxe models will cost $499 and $599 when released this November. A comparably powered gaming machine, the Xbox 360 is $200 less, primarily due to the exclusion of a next generation video disk format. Within days of the PlayStation 3's release, optional HD-DVD drives will go on sale for the Xbox 360 for $200, allowing Xbox 360 owners the flexibility of having the equivalent functionality of a PlayStation 3's high definition movie playback at a total price equal to the PlayStation 3. Whether Sony's large initial price tag and absence of choice for the consumer will impact the demand for the PlayStation 3 remains to be seen.
The inclusion of Blu-ray in the PlayStation 3 has also been a motivator in recent legal action by Sony. Lik-Sang, a popular video game retailer that specializes in exporting to customers overseas, has recently announced they will permanently close due to multiple Sony lawsuits. The lawsuits were filed in multiple European countries in which Japanese or American versions of Sony video game systems had been sold.
A Sony spokesperson went on record saying that, “ultimately, we're trying to protect consumers from being sold hardware that does not conform to strict EU or UK consumer safety standards,” and the lack of European certification for Japanese and American Sony gaming hardware was a key factor that enabled Sony to receive a satisfactory ruling from the London High Court. However, it is very unlikely that safety would have anything to do with Sony's motivation, as the Sony products being sold used the same hardware design as their European counterparts, and came with Sony power adapters that are suitable for European power standards. One clear motivator that was explicitly named by Sony was Blu-ray, and the Sony spokesperson elaborated; “[The American and Japanese PlayStation 3] will not play European Blu-Ray movies or DVDs.”
Like current DVD movies, Blu-ray uses region coding to limit consumers' choices and enable movie studios to better control video releases and pricing. Conversely, HD-DVD is region free, and any HD-DVD, commercial or otherwise, can be played in any HD-DVD player.
Those gamers who are willing to undertake the expense and trouble of importing gaming hardware such as the PlayStation 3 are usually among the most passionate gaming enthusiasts, and are willing to forgo the Blu-ray player functionality in order to get their hands on the latest gaming products. Such gamers have traditionally been able to order from resellers like Lik-Sang as legal “parallel trade” activity, which increases the choice for consumers while also preventing prices from being artificially high in any given market. Lik-Sang and other stories have been in the video game importing business for more than a decade.
However, Sony goal of putting a Blu-ray player of the correct region in every PlayStation 3 owner's home is so single minded that Sony has ordered all of their resellers not to sell PlayStation hardware outside of their specific territory.
In order to shut down Lik-Sang, Sony took advantage of the fact that only Sony's European products have specifically passed European safety standards, and were able to launch simultaneous lawsuits in multiple European countries as a result. Pascal Clarysse, Marketing Manager of Lik-Sang, responded to Sony's lawsuit by saying, “Launching separate court actions with separate claims and different judges is completely unnecessary, except for the fact that it helps reaching one single target: outspend Lik-Sang to death.”
While Sony's region coding is beneficial for Sony Pictures, and Sony's desire to put a Blu-ray player in as many homes as possible is understandable, this lawsuit does not seem like the actions of a company that is in touch with it's customers. The gamers that import are usually very fanatical, and are very likely to be the early adopters and vocal proponents of new technologies. Likewise, Lik-Sang probably generated a lot of revenue for Sony by stocking and selling their products over the last decade. Alienating their customer base while putting a long time reseller out of business seems to be a case of Sony biting the hand that feeds them.
Sony's marketing hyperbole and quality control issues with recent products (most notably the thin PS2 and laptop batteries) may cause them bad press, and division infighting and over reliance on Sony's proprietary formats have been named is weaknesses. However, an issue that Sony has not spoken about, and does not seem to by trying to rectify is their lack of respect for the customer.
Sony is a once great company that still occasionally puts out some great products. However, to get back to their roots, they may want to focus on the mindset that originally made them great. They may want to ponder the Japanese proverb; “The customer is god.”
Oh yeah !