[Text below extracted largely from my comments on this Hacker News discussion about this BBC news item although there is slightly more there it needs the context of the thread which I can't pull into this blog post easily (or legally given copyright laws).]
There is some truth in this article but it misses some of the really key factors.
- Value of the Yen. The Yen is seen as a safe haven and has been at almost ridiculous levels (considering trade balances and government debt) at least since late 2008. This is crippling exports (and/or profitability) in these price sensitive markets (TV's, computers, phones) as even though much production is abroad they still have massive cost bases in Japan.
- Development of Korea. LG and especially Samsung took the place of the aggressive upstarts driving down prices and then building up the quality as Japan once did to the West in markets such as cars. It will be interesting to see what China's development does to Korea in 15-20 years. So far the aggressive pricing from Korea has kept Chinese TV brands from prominence but that may not last.
- As Japan prospered and incomes rose it became uneconomic to manufacture commodity items there. Outsourcing and offshoring production damages the feedback and development loop between production and design that enables efficient optimum design of products. Also they narrowed the parts of the supply chain that they supplied to focus on the high value ones that could still be profitable but that costs control and foresight into important developing areas. e.g. Samsung could develop LCD panels in exact form factors to fit their devices and to use them as structural elements in TVs getting a jump start on Sony. (Sharp had[has?] their own panels but the quality wasn't uniformly high and they were overly dependent on their home TV market anyway).
- There is very little profit in many electronics items. TVs especially are not a source of profits (maybe Samsung makes some but it is hard to tell from their annual reports). Aggressive and falling prices, unstable panel supplies and the fact egos and ecosystems are on the line means that the once stable profit source of CRT TVs has been replaced by an LCD bloodbath. Even in mobile phones only Apple and Samsung are really making money (along with a number of component suppliers getting their slices).
[Sony have, movie studios, TV studios and record labels] however they lacked the internal structure and strategy to really deploy them effectively. Plus someone would have had to choose a suboptimal strategy for their division's financial results if they were to avoid selling some rights or exclusivity externally but to use it for joined up strategies. (Or the low profit hardware arm would have had to paid commercial rates.)
It also surprisingly gets harder in many ways to negotiate for other rights when you have your own studio/record label and who wants to only watch/listen to Sony content. Anti-trust law may be a factor in this (as a content owner Sony couldn't legally do an Apple and tell their competitors what pricing model to accept) but also it changes the tone of the negotiation and attitude of other parties when they are your competitor.
And finally just when the network technology and the products are getting to the point where a useful internet delivered content ecosystem can be established somebody high up the organisation decides to split the platform and bend over for Google in order for the honour of making the Google TV for US only under ridiculous contract terms based on Intel hardware costs and to be supported by a dreadful marketing campaign it still sows FUD amongst content partners.
geon > I don't see why being a competitor would make it impossible for Sony to build a media store. It worked for Valve...
Firstly I didn't say it would be impossible just potentially harder than if not a competitor.
I don't know the history of Steam that well but my understanding was that it started as an easy way to get their own games. Yes Sony Music could have done the same (maybe they did but I can't remember) but a store with a seemingly random selection of about 25% of pop music doesn't make a great hit in the era of Napster and when they are still pushing DRM (which Steam also uses).
I don't believe that as a company with about 25% of the music market could legally impose pricing conditions on it's competitors (Valve may allow flexible pricing but iTunes did not at least at the beginning and I don't believe was such a proportion of the market at the time).