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A TV Thinner Than a Credit Card: Sir Howard Stringer, Chairman and CEO, Sony

Howard Stringer

Sir Howard Stringer has been chairman and chief executive officer of Sony Corporation (SNE) since June 2005. He is the first non-Japanese leader of this global manufacturer of audio, video, game, communications and information-technology products for the consumer and professional markets. In addition, its music, pictures, computer entertainment and online businesses make Sony one of the most comprehensive entertainment companies in the world, with sales of approximately $88.7 billion and 180,500 employees worldwide. But Sony has made some costly missteps in recent years, addressing too late the transitions to digital-music players and flat-panel televisions. Now, as Sony works to take back its leadership position in the electronics industry, Stringer pushing the company to be more innovative, more agile. “I’m asking you to get mad,” Stringer said in a recent speech to employees, demanding that they be more “energetic,” “bold” and “imaginative” in running Sony’s businesses.

  • Walt takes the stage, followed by Howard Stringer. Walt notes that Stringer was voted best speaker at a previous D and then asks Stringer what’s happened in the two years since he last appeared at D.
  • Referring to his recent, “let’s get mad” speech at Sony, Stringer says that the company is “climbing up the mountain.” Its confidence is returning, he says.

    Sir Howard Stringer

  • Walt asks about Sony’s LCD business. Is it successful? Are you making a profit? Stringer: If we were any more successful, we’d be bankrupt.

  • What’s Sony looking ahead to? What’s beyond the LCD? Stringer says the LCD has plenty of life in it, but notes that Sony is developing an OLED TV that’s quite amazing. Its contrast ratio is a million to one, he claims, a hundred times brighter than an LCD screen.
  • Turns out Stringer’s brought one of the screens which Sony sells for $2,500 along with him. Walt asks about a D discount. Stringer: “$1.75 off .. with the purchase of a Kindle.”
  • The screen is astonishingly thin. 0.3 mm wide. Thinner than a credit card. Stringer says you could actually wrap it around your arm if you wanted. “If it was any thinner, you could walk through it,” says Stringer. The screen is very, very bright as well. Sony plans to introduce a 27-inch version soon. But at $2,500 per 11 inches, you’ll need a Stringer-sized salary to afford one.

    OLED Display

  • Walt asks if we’ll see screens like these in laptops. Stringer says we will, but it will take some time. Walt: Will this supplant current TVs? Stringer says it will. It’s a perfect TV companion, says Stringer. Every time someone comes into my office, they ask how they can get one.
  • Is Sony manufacturing these devices itself? Stringer says it is. Screen is apparently “electricity flowing through chemicals.” And the process used to create it is very difficult. Sony is working to commerialize it.
  • Moving on to the PlayStation 3 and its bumpy ride at market. Stringer admits the device had a rough time of it in the beginning–“It was on life-support for a while”–but says it’s in good shape now, adding that Grand Theft Auto IV and some other games that are in the pipeline that make good use of the PS3’s processing power will really give it a boost soon.
  • Conversation moves on to Blu-ray. Stringer says Sony won the Blu-ray battle because of the PS3 and its Blu-Ray drive. Notes that if it had lost the format war, his gravestone would have read “Betamax 2.”
  • Walt: I thought you won that battle because you paid the studios more than the HD-DVD group did.
  • Stringer says Walt’s mistaken. “We were not in the check-writing competition.” Notes that Sony had great support from Disney and others.
  • What do you expect to gain from this format war victory? Walt asks. Especially when, as Jeff Bezos just noted, the world is moving toward digital downloads?
  • Does physical media even have a future? Stringer notes that historically there has been a long lead-time in format evolutions like these. It will be a long time before people start migrating away from Blu-Ray to digital downloads. “When you see ‘Lawrence of Arabia’ on Blu-ray, you realize for the first time how many Arabs were in the movie,” he quips, alluding to the format’s definition and detail.
  • What’s the future of theatrical movie distribution? Stringer says that movie chains have been too slow to adopt new technology and are suffering for it. That said, he notes that movie theaters create a shared-experience that some people enjoy. He compares them to circuses and rock concerts which some predicted would fade away, but are still quite popular.

Sir Howard Stringer

  • Moving on to computer production, Walt asks about craplets, noting that Sony is a leading purveyor of them. Walt notes that he bought a Sony Vaio and it was loaded with three old movies he didn’t want, but was asked to pay for. They made the machine slower. Steve Ballmer said last night that Vista’s poor reception may have in part been do to PC makers like Sony loading up their machines with craplets that slowed the OS down. “Are you willing to say today that you’ll stop putting craplets on your machines?” Stringer was noncommittal: “I have to determine whether the joy of craplets is worth preserving.”
  • Is there room for two devices in a digital-music player market dominated by the iPod? Stringer feels that there is.
  • Moving on to the Q&A: In answering a question about innovation, Stringer mentions the tough struggle of how to encourage entrepreneurs and Sony’s commitment toward building a culture that accepts innovation.
  • A musician steps up and asks about Sony’s pursuit of audio quality. The expenses are mind-boggling, Stringer says. We have audio engineers, he explains; Sony is an engineering culture. We have engineers who keep making reds redder, etc. The same is true for audio: constantly improving, refining. But, the musician interrupts, he feels badly about the quality degradation from the studio to the final product. Stringer acknowledges this: “We’re still trying.”
  • Question about the face-off between telcos and cable companies: Sony battled for about two years to use its TV without a set-top box, Stringer says. We did it with Comcast, and in the end it was a satisfying process. As a former toiler for Verizon, I see two sides: those who build infrastructure who try to preserve their investment, and I see the point of those who say “make it all free.” As a big company, we negotiate very hard. I see the difficulties of it. But to keep from becoming a 900-pound gorilla, the customer has to come first.
  • Will Sony ever produce software that’s as impressive as its hardware? Stringer says that’s a question he hears a lot. Contrary to popular opinion, he says, we have a lot of software engineers at Sony. Stringer notes that Sony’s problem has been that software has long been viewed in the company as an embedded product and that the company’s challenge is to extend it beyond that. This is something Sony’s been working on since the advent of the PS3, and he hopes to see the fruits of it soon.
  • On iTunes: “I have my own hostility to iTunes and I’ll get blogged to death for saying that.”
  • For more coverage, see The Wall Street Journal and Barron’s Tech Trader Daily.

A note about our coverage: This live blog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations expeditiously written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Video highlights from the session with Howard Stringer are here.

Sir Howard Stringer Session Photos

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