Sony Explores Sale of Vue, Signaling Shift on Streaming

Among the companies that Sony has approached about Vue is FuboTV, a sports-oriented streaming service, although those discussions haven’t gone anywhere, according to one of the people. The business is likely to be valued in the tens of millions, the person said.

Word of Sony’s exploration of a sale of Sony Vue comes as the trend of people cutting the cable TV cord shows signs of accelerating, as a spate of big companies from Apple to Disney to AT&T’s WarnerMedia prepare to launch Netflix-like on-demand streaming services at a much lower cost than the cable-like offerings from Sony and others. On Thursday, cable giant Comcast reported that it lost 222,000 video subscribers in the third quarter, more than twice the number it lost a year earlier.

Sony was one of the first companies to offer what was dubbed a “skinny bundle” of cable channels, referring to a smaller programming lineup offered for a lower price than conventional cable. After Sony’s offering rolled out four years ago, satellite TV network Dish launched its Sling TV, YouTube jumped in with YouTube TV, while DirecTV and Hulu both followed. The trend seemed popular at first: around 8 million subscribers now use one of the services, helping offset cord-cutting from traditional cable.

But rising programming costs made it tough for these services to make any money, forcing each of them to raise prices—choking off growth. Sony has increased the price of Playstation Vue three times—most recently last summer when it upped the price of all of its plans by $5 per month. Now its cheapest plan is $50 per month. Despite that, the service has been a money-loser for the consumer electronics company, according to two people familiar with the situation. 

Sony hasn’t been actively marketing its Playstation Vue product in recent years, which is an indication that the service hasn’t been a focus for the company, said Eric Haggstrom, forecasting analyst at eMarketer. 

DirecTV, part of AT&T, also has sharply raised prices for what was called DirecTV Now—now renamed AT&T TV Now—to $65 a month for the cheapest tier package from $50. It has been losing subscribers for the past couple of quarters, finishing June with 1.3 million subscribers, down from nearly 1.9 million at the height. 

Other services have continued to grow. Sling had 2.5 million subscribers as of June 30, up 24,000 from the previous quarter. Meanwhile, Hulu’s service Hulu Live has more than 2.5 million subscribers while YouTube TV has around 1.5 million, according to people familiar with the matter.  

Some analysts question the future of this sector of the TV market. “I think we will see some of these offerings go away eventually,” said Haggstrom. “The same forces that are affecting the traditional TV bundles are affecting these skinny bundles—particularly increased carriage fees—since they are essentially the same product.” While Haggstrom remains bullish on Hulu and YouTube’s offerings, he isn’t sure about the future of the rest of them, he said.

Sony did not respond to requests for comment. A FuboTV spokesman declined to comment.

It is unclear if Sony can transfer its programming contracts with the entertainment companies whose channels it offers as part of a sale of Playstation Vue or if there have been any interested buyers. Within the entertainment industry, the rates that Sony has paid to carry cable channels are widely considered to be among the highest of its peers. Unlike Hulu, which was owned by the media companies, or AT&T, which can use DirecTV to negotiate preferable rates for AT&T Now, Sony had little leverage with the networks.