Sony’s New Tune

Sony, arguably Japan’s most iconic brand, is turning to an American chief executive, Howard Stringer, to lead the company. Blame Sony’s desperation on the iPod, Apple’s hot digital music player that has single-handedly destroyed Sony’s reputation as the world’s foremost consumer electronics innovator.

Carlos Ghosn, the acclaimed Brazilian chief executive credited with turning Nissan around, helped pave the way for another foreign CEO, a potential trend urgently needed in insular Japanese corporate culture.

The other seismic aspect to Stringer’s ascension to the top of Sony Corp. is not that he’s a Westerner who doesn’t speak Japanese but that he’s not an engineer. Stringer helped revive Sony of America’s moribund music and movie businesses, and earlier spent decades as an executive at CBS, so he’s more in tune with David Letterman and Spider-Man than the technology inside Sony Walkmans, VCRs, CD players and PlayStations.

Sony, which ambitiously set out to be both a hardware technology concern and a content provider, has stumbled badly in recent years. It paid an extravagant price for a Hollywood studio, lost its vaunted edge in television set production to savvy competitors in South Korea and China and got shut out of the burgeoning MP3 player sector.

For more than a decade, the company also has struggled to manage a painful restructuring that tried to keep up with the reshaping of the global entertainment industry by digital technology. Sony executives knew the digital revolution was underway but failed to produce a steady stream of must-have gadgets.

And for all the talk of synergy, Sony has not convincingly shown that it’s advantageous to produce both the electronic gadget and the video or music that gets played on it. Making such a vision work, or revisiting the strategy of competing with Hollywood and Silicon Valley simultaneously, is Stringer’s daunting challenge.

On the consumer electronics side, Stringer will have to take on Steve Jobs, who was invited back to Apple in 1997 to reverse a similar corporate decline. Apple has morphed from a stylish but failing computer maker into a direct competitor of Sony on the strength of the (also stylish) iPods that changed music listening in much the way that Sony’s Walkman did 25 years ago.

Sony expects to continue making money from devices that play music, movies and video games. It also wants to sell the content needed to keep those machines busy, which is why the company is buying the fabled Metro-Goldwyn-Mayer studio. That means Stringer must walk a fine line by persuading consumers to buy more electronic goods from Sony even as the company struggles to keep those same consumers from using its technology to pirate the hottest titles.

Hollywood once famously waged a legal battle against Sony’s video recorders. That cultural divide separating hardware makers (who want to empower consumers with technology) from content providers (who are nervous about this empowerment) remains deep. Stringer’s elevation seems to signal a profound choice by Sony to see entertainment as its future, possibly at the expense of the consumer electronics empire that became a symbol of postwar Japan’s resurgence.