SonyWhat if Sony were to open a theme park? For a few years now, I have been asking prospective job applicants this question. It gives candidates a chance to show how well they can deal with strategic brand issues, and gives us a chance to see how well they think. It’s no coincidence that I ask the question about Sony rather than any other company. Only Sony has the breadth of offering – consumer electronics, movies, music, computing, robotics, gaming and communications capabilities to make a truly state of the art theme park. Imagine the rides and roller-coasters based on Sony movies or on Playstation games, the concerts given by Sony artists, the immersive virtual reality experiences, and the circus shows of robot animals. Imagine the zones devoted to people’s own personal creativity, with video, audio and computing technology linked together so that visitors could make their own movies and games with which to remember their visit. Now try to imagine JVC, Matsushita, Toshiba, or Samsung attempting the same thing. These other companies just don't have a brand credibility to consider it.Thinking about Sony in this way brings home just how extraordinary they are at managing their most important intangible assets – their brand, their culture, and their knowledge. Right from the outset, Sony understood better than its competition the importance of branding. The two founders, Akio Morita and Masaru Ibuka deliberately set out to find a name that would work in every country around the world. The name is based on the Latin ‘Sonus’ (sound) and it also looks a little like the word ‘sonny’ (i.e. ‘little son’. Today it has been wonderfully post-rationalised on their website as being “used to show that Sony is a very small group of young people who have the energy and passion toward unlimited creation”. Those elements of entertainment, youthfulness, and invention have remained consistently central to Sony’s brand. The way that the name itself was created is indicative of a culture that values simplicity and usability as well as the potential for globalisation. That ‘passion towards unlimited creation’ was there right at the outset. A culture that encourages innovation and the development of new knowledge within the corporation was there from the outset. Morita was the academic physics student, Ibuka was the commercial electronics engineer. That heritage of mixing academic research and practicability shines through today. Sony’s greatest inventions, the Walkman, the Playstation were both developed in-house by long-term employees of Sony. The Walkman became an icon of global youth culture in the 1980s, and remains the gold standard for innovation. The Sony Playstation saw off competition from established games console manufacturers soon after it was launched. Sony is indomitable when its culture of internal staff development and technological innovation and its desire to create new knowledge are linked to deep consumer insight about how people wish to be entertained. Young people want to listen to their music on the move. Games consoles are about the games, not the consoles. AIBO, the cute (and expensive) robot dog that inspired a raft of me-too toys last Christmas, trounced the unfriendly, obscure academic research robots that we had become to seeing coming out of MIT Labs and straight into Tomorrow’s World with the simple idea of combining robotics with entertainment. Robots can be fun. Bypassing Tomorrow’s World, one of the clever little silver dogs immediately became a regular on the set of ‘So Graham Norton’. In Japan, Sony has stood for years as a symbol of success, personal achievement and independence against the bureaucracy of post-war Japan. As a generation of Sony consumers has grown up, Sony has been able to successfully launch a life assurance company, Sony Life, that appeals directly to those values. Sony fails when it is held back by its strong, sometimes monolithic, internal culture or when it doesn’t make an insightful connection to the personal entertainment needs of its consumers and thus breaks the brand bond that it has made with them. Moving into content (movies and music) was strategically essential to Sony’s long-term vision and survival, but it has taken a few years for Sony to get to grips with these industries. Sony’s first personal computers were straightforward windows PCs and were not a success. Only when Sony recaptured their heritage with the VAIO range did they build a personal computing business of any scale. The VAIO range builds on Sony’s reputation for sleek design (hitherto noticeably absent from the PC market) and also for integration with entertainment products – the name VAIO stands for Video Audio Input Output. Betamax, Sony’s video recording standard that lost out to VHS, failed for cultural reasons and out of failure to understand consumers. Sony did not manage to make license agreements with other manufacturers, and JVC did manage to form a consortium over the VHS format in 1977. Sony’s Betamax could only record for one hour, and VHS could record for two. Crucially for consumers, that meant that only VHS could record and entire sports game. Sony clung to claims of technical superiority for Betamax that few consumers could discern whilst VHS reached tipping point – increased sales brought down unit production costs and therefore consumer prices, movie companies saw VHS capturing share and stopped distributing pre-recorded tapes on the Betamax format. It wasn’t until VHS commanded 95% market share that Sony finally gave in and abandoned Betamax in 1987. So why isn’t there a Sony theme park? Today, the Sony brand more or less owns ‘home entertainment’. It makes the TV sets, the CD players, the DVD players, and the video games consoles. It also owns a lot of the music and DVDs that will be played on it. Its forays into the movie business mean that it is making real headway into owning part of ‘movie theatre entertainment’ too. Given that the brand has so much equity in entertainment and creativity, and has access to so much content, surely the theme park is a natural idea to tie these elements together. Perhaps there are plans for such a park, but the real reason is probably that Sony has grander plans: They don’t want you to merely visit a theme park, they want you to have a Sony Life. The fact is that this generation is the last that will have record collections. Never again will splitting up with your boyfriend entail sifting through a pile of CDs deciding who gets what - although custody of the robot dog might remain an issue. That stack of hi-fi, each piece specialising in one physical media format, will be redundant. In the future music, games and videos will be delivered to our homes via broadband Internet connections to be saved to hard disk or to be played immediately. Sony’s vision is that entertainment content (which Sony owns) will be piped into your Playstation2 (which Sony makes and which has a space ready for a network connection) and then played on your TV or stereo (which Sony also makes). It’s not just about passively watching or listening, however. Sony leads the trend in personal creativity. Their UK ‘Go Create’ campaign is just a small indication of this. They expect that you will take part in Playstation games that mix Sony Music, Sony Pictures, and your own creativity to develop what Ken Kutaragi, divisional CEO of Sony Computer Entertainment, calls ‘a new type of entertainment’. Don’t worry about leaving the house, Sony’s mobile phones will receive entertainment content when you’re on the move. Sony already run an ISP in Japan, and announced this year that they will launch a bank to complement their credit card and life assurance services. You’ll be able to pay for your Sony entertainment, delivered along Sony’s cable, using your Sony bank account. Only Sony, with that brand, that culture, and that ability to create new knowledge, could dare to hope to pull this off. |