Sony Europe’s TV chief gets real on TCL joint venture
Sony needs TCL. No one’s saying this outright, of course. However, in this interview, Sony TV boss Charlie Ohama explains why size has suddenly become more important than pride. And why Sony will stay Sony.
Sony invited me and a handpicked selection of journalists to the London unveiling of the Bravia 9 Mark II, Sony’s first True RGB TV. On the sidelines of the event, I got the opportunity to speak to Charlie Ohama, Sony’s Head of Home Entertainment for Europe.
It wasn’t the first time I’d had a conversation with him. In fact, whenever I talk to Charlie, I appreciate that he’s one of the few industry bosses who’s consistently frank – even when things get uncomfortable. Take Sony’s joint venture with TCL, for example. Before the interview, Sony asked us not to delve into the issue too deeply, due to the fact that many details hadn’t been finalised yet.
But Charlie being Charlie, he revealed quite a bit.
Source: Sony Newsroom
Charlie, last year, you told me that Sony was making a conscious choice to focus on the premium segment and leave the mass market to the competition. Eight months later, the joint venture with TCL was announced. So was that shift really a conscious choice? Or were you already aware at that point that something was changing?
Charlie Ohama: (laughs) That’s a very good question. Scalability is important in this business. TCL and Hisense are making a strong push into the market, which is one of the reasons why the average price of TVs is coming under such intense pressure. In this environment, scale is becoming increasingly important; it allows us to remain competitive and continue to invest in innovation over the long term.
Can you be a bit more specific on that?
Sony will continue to focus on the premium segment, but at the same time, we need a solid foothold in the mass market. This joint venture intends to strengthen our long-term competitiveness and accelerate future growth.
«The market always revolves around three or four major brands. At Sony, we’re clear on wanting to remain one of those brands.»
So was that «conscious choice» you mentioned back then just a preemptive defence?
I wouldn’t put it that way. The market’s changing and we’re changing with it. If you look at the consumer electronics industry, the market always revolves around three or four major brands. That’s what’s happening right now in the TV market too. At Sony, we’re clear on wanting to remain one of those brands.
In our Community – and probably elsewhere too – the reaction to the January press release was a resounding: «Great, soon we’ll be getting TCL TVs with the Sony logo on them. The days of Sony quality are over.» What do you say to that?
I get where they’re coming from, but I can assure you that’s not what we’ve set out to do. Our goal is to preserve Sony’s DNA while strengthening the business through this joint venture.
So we’re not talking about a licensing model here?
No. When it comes to deals like that, the brand might keep five per cent, while the manufacturer gets the rest. Basically, you’re just buying the name. That’s not what we’re doing. I mean, Sony holds a 49 per cent stake in this joint venture. So the structure reflects a genuine strategic partnership, with both companies bringing their own strengths to the table.
That concern isn’t entirely unfounded, though. TCL will hold the other 51 per cent. How would you preserve the strong points of a Sony TV if TCL wanted to use cheaper components? Say, in areas where Sony has previously insisted on quality?
These are questions we’re currently addressing in negotiations. What I can say is this: our strength has always been image processing. It’s been processors, and how they bring a display to life. That’ll still be part of our DNA. True RGB is actually the best example of this. The thing that makes this TV unique isn’t the panel itself. It’s the backlight and how we control it. That’s Sony. And it’ll stay Sony.
In the article I wrote a few months ago, I argued that TCL delivers industrial-grade power, while Sony delivers intelligence and fine-tuning. How right or wrong was I about that?
(laughs) I’d say you were pretty close. That’s precisely the idea. TCL has a strength that we don’t have: deep vertical integration and the ability to scale up to massive volumes at relatively low cost. In turn, we have something TCL doesn’t: excellent image processing, brand value and an understanding of the entire process from the camera to the living room. The result of that should be a Sony TV, only aimed at segments and price points we’ve had little presence in until now.
Sony and TCL TVs will apparently still be displayed side by side in stores and competing with each other. How will that work in a joint venture? How would you explain it to a customer who’s trying to decide between the two?
Actually, that’s one of the unanswered questions we still need to hash out. Our objective isn’t to sell TCL TVs bearing the Sony logo. We want to sell Sony TVs, with everything that entails.
A year ago, you told me that Sony’s strong point is sourcing the best panels available, be it from LG, Samsung or whoever, then enhancing them with Sony processors. Will Sony continue doing that or will the joint venture change things?
Processing has always been in our DNA. I can’t confirm whether we’ll be buying panels from one or another manufacturer. However, there’s one thing that won’t change. We’ll take any panel – no matter what kind – and use our expertise to turn it into the best product possible on the TV market.
«Breaking into the low- and mid-priced TV market is shockingly easy. It’s the premium segment – where the wheat is separated from the chaff – that remains a challenge for everyone.»
While we’re on the subject of the TV market: earlier, you mentioned scaling. Why is there such intense price pressure in the TV market?
Because there are loads of no-name manufacturers who build cheap TVs for every brand, then just slap the brand’s logo on the device. This happens with smartphones, headphones or cameras much less often because the hardware and software form a closed ecosystem. Aside from that, consumer demands are becoming increasingly difficult to meet. People may want bigger and better products, but they’re less willing to spend a lot of money on a TV. That makes business extremely difficult. It’s also exactly why scalability is essential for staying competitive in the long run.
Now you mention it, a Chinese manufacturer of robot vacuum cleaners recently asked me if I’d like to test their new TV.
That’s precisely the problem. Breaking into the low- and mid-priced TV market is shockingly easy. It’s the premium segment – where the wheat is separated from the chaff – that remains a challenge for everyone.
That brings me to the Bravia 9 Mark II. Samsung and LG are also releasing their own versions of RGB Mini LED TVs this year. What does Sony do better than them?
I think you’d better ask Akiyama-san that (laughs). Seriously though, it’s not the panel that makes the difference. It’s the sensing algorithm; the way we monitor and compensate for the LEDs in real time. No other manufacturer does that. And it’s actually the real reason why we say «True» RGB instead of just «RGB Mini-LED».
Given the joint venture, is that still Sony’s technology or has it become a joint one?
It’s Sony’s technology. Akiyama-san developed the algorithm from scratch, so it belongs to us.
Where do you see True RGB fitting into the larger Sony roadmap? Is it the future or just a step along the way?
It’s a step along the way, but a very important one if you consider how LCD technology is evolving. Somewhere at the end of that evolution, there’s Micro-LED, which involves every pixel emitting its own light. That’s the ultimate goal. Seeing as Sony has gained so much expertise in backlight control, we’re well positioned to achieve it.
Even so, if RGB Mini-LED and OLED eventually become so good that the difference between them and Micro-LED is barely perceptible, will the enormous research and development costs of bringing Micro-LED to the mass market still be justified?
I think you’re underestimating human nature. People are always looking for something better. That was the case with smartphones, it was the case with headphones and it won’t be any different with TVs. The arrival of Micro-LED is definitely in sight. I can’t tell you whether it’ll hit the mass market in two years or five. All I can tell you is: that day is going to come.
I write about technology as if it were cinema, and about films as if they were real life. Between bits and blockbusters, I’m after stories that move people, not just generate clicks. And yes – sometimes I listen to film scores louder than I probably should.
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