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Journalists Discuss Sony’s Image And Stock Decline 

Stock Drops In US And Japan

December 15. 2008

Sony chairman Howard Stringer

A series of articles have been published via several press outlets, discussing Sony’s lack of consumer confidence, in the wake of numerous scandals that have hit the company. All the articles bore that common thread and wondered out loud why Sony has not come to the realization that the public is questioning their integrity.

It’s time for Sony to make amends for the unethical things it has done or it will continue to see its fortunes turn for the worse. Public image and consumer confidence are important and Sony is taking the biggest hit in these areas. Here are a few article excerpts:

As one observer pointed out, Sony stock has seen the biggest decline of all the major Japanese companies on the market:

Since, the first of the year, Sony stock prices have declined by close to 65% while the S&P500 has declined by about 40%. Of course, Sony sells to a consumer market, which has taken a big, hit and have to deal with the exchange rate problem. But so do Nintendo, Panasonic and many other quality Japanese companies. Their stock prices haven't fallen anywhere near what Sony's stock has.


Big numbers - but according to some analysts, not big enough to make the savings Sony desperately needs in response to a stubbornly rising yen, flailing consumer confidence and global financial turbulence.


Sony needs a common-sense czar

With so many czars running around trying to solve the nation's problems in tech, auto and drugs, perhaps Sony should consider hiring a common-sense czar.

Is there any major consumer company around that seems to understand basic customer relations less than Sony? Isn't rule No.1 in the CR manual, "Don't spy on customers?" If so, then rule 1-A must be: "Take extra care to avoid spying on customers' children."

The latest example of Sony's disconnect with the masses came this week when the company's music division was fined for surreptitiously collecting information on children under 13-years old.

On Thursday, Sony agreed to pay $1 million to the Federal Trade Commission for collecting information on 30,000 children without obtaining parental consent. According to the Associated Press, Sony violated the Children's Online Privacy Protection Act when it collected the data from hundreds of fan sites, including those of such musical acts as Kelly Clarkson, Britney Spears and Christina Aguilera...

Sony's growing list of scandals raises the question of whether anyone at the conglomerate has an ounce of public relations savvy. If they don't, the company should find someone fast and that person's mission should be to smack down overly zealous marketing types who come up with lamebrain ideas like this one.

Or how about the one for last year's promotional party for the PlayStation 2 game God of War II that turned into an international embarrassment for Sony. In keeping with the video game's Greek mythology theme, comely women were hired to prance around topless and feed grapes to partygoers as part of the "theatrical dramatization." If that wasn't over the top enough, the centerpiece of the festivities was a butchered goat that was dressed up to look like the animal's entrails were falling out...

Then there was the company's supreme blunder, which also came from the music division.

Before Sony, even some hardcore techies were unfamiliar with rootkits. Now, the two are synonymous. In 2005, Sony loaded MediaMax CD 3 and Extended Copy Protection (XCP) software on music CDs to help boost copy prevention. The software loaded a rootkit malware onto the PC of anyone who loaded the discs. Rootkits are programs designed to hijack control of a computer.

Texas' attorney general filed suit against the company and accused it of loading spyware onto computers. Class action suits were also filed in New York and California. The fallout lasted years.

The rootkit debacle makes this latest child-spying case all the more mind-boggling. Even if you give Sony the benefit of doubt and discount the possibility the company is evil, then what are you left with? Yes, that's right: incompetence.

I have met a lot of smart people from Sony and I have to believe that some of them realize the company is developing a nasty reputation as an enemy of consumer privacy.


Sony's PS3 A Sinking Ship: Sales Plummet

Alone among the three major videogame consoles, sales of the PS3 are down about 19% from November 2007, according to the latest stats from the NPD Group. Sony was only able to sell 378,000 PS3s this November, compared to 466,000 last year.

And the problem for Sony isn't the recession, it's the PS3. Microsoft (MSFT) put up respectable numbers with its Xbox 360, selling 836,000 units vs 777,000 in November 2007. And Nintendo's (NTDOY) Wii continues to dominate the market, more than doubling sales from 981,000 to 2.04 million.

So why is the PS3 flopping so badly?


Hey, Sony, leave those kids alone: Settlement in COPPA case

The largest COPPA settlement to date was handed down Thursday when Sony BMG agreed to pay out $1 million for having collected and used without parental consent personal information on tens of thousands of kids under 13.

The violations of the Children's Online Privacy Protection Act involved 196 fan sites for musical acts such as Good Charlotte, Kelly Clarkson, Chris Brown, Britney Spears and Christina Aguilera...

Eventually, Sony Music's databank held information on over 30,000 kids, many of whom went on to build profile pages (which could display their age), enroll in fan clubs that sent e-mail to them directly, and so forth…

Bad Sony! No biscuit!…The order also requires that Sony Music clean up its act, delete all the improperly collected information, acquaint its employees with the FTC's




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