Sony gearing up to offer Music on PSN?

[Elandyll]

According to analysts, that's what the move to buy the Bertelsmann portion of Sony BMG might let them do soon, among other electronic outlets.

http://www.guardian.co.uk/business/feedarticle/7703622

LOS ANGELES, Aug 5 (Reuters) - Sony Corp has raised its stake in a shrinking music recording industry, perhaps with a view beyond just selling CDs to a future where songs will play an important role across its various media and devices.
Sony, with interests from cell phones to movies to video games, on Tuesday agreed to buy Bertelsmann's 50 percent stake in Sony BMG, ending a four-year venture that struggled amid sharply declining industry-wide CD sales.
"It seems to me that Sony has made a corporate decision to double down on recorded music," said entertainment lawyer Kenneth Freundlich. "Since it's already in game platforms and electronics, it seems they're going back to the 'content is king' strategy and taking the recorded music forward into these other platforms."
Analysts said owning all of Sony BMG would enable Sony to more easily integrate and license the music catalog into games developed for its PlayStation game console, television programming, mobile phone offerings and even films.
The sale for about $900 million had been expected since Bertelsmann Chief Executive Hartmut Ostrowski has said divisions not meeting their targets would be sold.
The German company gets $300 million in cash on Sony BMG's balance sheet, valuing the deal at about $1.2 billion, though the value to Bertelsmann, including tax breaks, is higher.
Retail U.S. music shipments fell to about $10.4 billion in 2007 from a 1999 peak of $14.6 billion, according to the Recording Industry Association of America.
With the outlook for CD sales no better, analysts believe Sony is looking to put music to more lucrative uses.
IN THE GAME
While sales of legal downloads have risen with the help of services like Apple Inc's iTunes, they have not made up for the impact of rampant Internet piracy. Video games, however, have provided a bright spot for music lately.
This spring, for instance, veteran glam-metal band Motley Crue released their "Saints of Los Angeles" single on the "Rock Band" video game and iTunes and the "Rock Band" sales were five time higher than on iTunes.
Another part of the strategy could be the ramp-up of its PlayStation Network, which lets gamers play each other, as its PS3 battles Microsoft Corp's Xbox 360 console.
"Sony will be attempting more aggressively with PlayStation Network to create an Internet-distribution platform for content," Lazard Capital Markets analyst Colin Sebastian said. "Music is a very popular form of content and they want to be well-positioned as they roll that out. I think this acquisition would be related to that."The Japanese company also wants to expand aggressively in mobile entertainment, including music.
Sony BMG, home to artists like Beyonce, Bruce Springsteen and Celine Dion, recently reached a deal with Nokia Corp to offer free unlimited downloads to Nokia's music phones. Sony also has a cell phone making joint venture with Sweden's Ericsson.
Meanwhile, Pali Research analyst Richard Greenfield said the Sony BMG buyout offered little reason to expect a big improvement in valuations for stand-alone recorded music companies. It values Sony BMG at 4.5 times estimated 2008 earnings before interest, tax, depreciation and amortization (EBITDA).
Pali's analysts estimate rival Warner Music Group Corp trades at 7.0 times 2008 EBITDA, though that drops to 4.6 times excluding its publishing business to make a fair comparison with Sony BMG. (Editing by Braden Reddall)