 Hey guys, it's Neil with The Verge. I'm here at CES 2014, our studio, and I'm joined by a very special guest. This is Sony Electronics' new president and COO, Mike Fasulo. Thank you for joining us. Oh, great to be here. You've been on the job for six days, seven days? I think today's the seventh. I would make it seventh. You started on January 1st. January 1st. And this is your first interview on the job, so thank you very much. First interview. Thank you very much for joining us. Oh, my pleasure. But you've been at Sony for a long time. Just about 30 years. February 2014 will be 30 years. Wow. And what roles have you held at Sony? Not all of them, I'm sure there's a lot. Many, many. Some folks say I can't keep a job, but I've had roles starting in... I actually studied finance, so started in finance and went to operations, to sales, did Sony startup for direct business or direct online and store business in America, did a turnaround for a media company, CMO. Wow. You've been all over the place. You were the CMO of Sony. I was the CMO of Sony Electronics. You were telling me that the year that Sony had Taylor Swift at CES, that was you. That was correct. Did you just call her up and say, hey, we're doing a 3D TV thing, can you stop by? Yeah, I wish. If you see her, ask her, you know Mike? See what kind of response she had. Well, that's great. But so now you're in charge of Sony Electronics, which is sort of the North American kind of gadget division, right? I mean, this is where you guys make the stuff, not necessarily the TV studio, the movie studio. This is where you make the... We're electronics....you guys are electronics. We're electronics. And Sony is on a tear here at CES. Actually, Kaz Harari just gave his keynote, and he announced a live TV service, an internet-based live TV service with video on demand. He announced a new PlayStation online streaming initiative to stream games or anything. And then you had a bunch of announcements yesterday. Did you feel coming in that this was going to be a big year, a big year of ambition for Sony? Absolutely. Or was it just sort of a normal, hey, what's all the stuff we have? I don't know. I mean, this has been in the plan. I mean, Kaz has really put together such a passion within the company. He spoke about Kando. In Japanese culture, they call it Kando. It's passion and emotion, not simply technology, but how does technology translate to emotion and passion? And how do you get that instilled in all of your employees and ultimately out into marketing, to consumers? And he's just done a phenomenal job in such a short period of time. And last year, we actually were leading our way in with 4K and other great advancements. And this year, we're just... The confidence is back. The product is back. And we're looking forward to just having a great year and really getting consumers really excited. Well, so there's been a number of product areas that the company has been focused on. We've got cameras sitting here. And imaging has been a big one. 4K for you yesterday was an enormous point of focus. And then obviously, there was this gaming stuff. And then what I was surprised about was today that he announced this live television service, which has been the missing piece here at CS. You guys always have new TVs. They always look more beautiful than ever. And there's always this, well, I've still got a cable box. What's happening with this live TV stuff? Well, I think live TV is a big announcement today. I won't take that away from Kaz. He's speaking with you a little bit later. And I'll let him get into more detail. But it really goes to giving customers choice, availability, content. We own content companies. But we want to provide content as broadly as possible and as easily as possible. And this is another way to do that in the live space as well as the gaming space. So I mean, if anybody could do that, it should be Sony. And now we are. Right. And so let's talk about that content stuff. So you announced new 4K TVs. I will say it's interesting that everybody else here has, they're curving their TVs this way. You've remained flat, which, you know, I struggle to see the value of the curved displays. I think they're very interesting technologically. It's cool that they can build them. I haven't been told why. But you're making wedges. Why are you guys doing wedges? So the wedge is twofold. The design is just fabulous. I mean, if you look at the design, whether it's hung on the wall or on a stand, it's just fabulous design. But it also gives you more immersive sound. So in the wedge, as it wedges to the bottom, we actually have tweeters in there and woofers in there that give you a much clearer quality sound and makes it more immersive in addition to the best picture quality of 4K. So we're actually, this year we'll be bringing out nine new 4K television models. And the flagship was our 85-inch model that I showed last evening. I also showed the wedge 79-inch. But we're trying to attract all the, get every passion from the consumer addressed in how they want to enjoy content. Make the quality as important in audio as it is in movie watching or video. So that's the open question, right? You've got beautiful 4K TVs. The industry is figuring out sort of what form factor is going to work best for them. I think that's always very interesting. But the open question, I think, has been distribution. How are you going to get content from the cameras? You guys make the cameras. How are you going to get content from the cameras and the studios who are making it already to the consumer? And that's been basically question mark. But you guys announced some partnerships, and you're feeling kind of confident about that? Yeah, I talked quite a bit about that last evening, and it's very pleasing to see that all your cameras are Sony cameras. Thank you very much. We did that just for you. We're very proud of that. We're proud of that for every brand. 60% of the industry does that just for us. But thank you. Thank you anyway. Yeah, so if you look at it from a, you know, the holy grail is distribution, right? Production and distribution. And with 4K, it goes well beyond the panel. And from a consumer perspective, I think they need to be aware of it's more than the panel. So when you're looking at televisions, it's the technology that goes into the television beyond the panel that can make that really wow factor that Kaz talked about today in viewing. I mean, 4K, you can get two inches to the screen and no pixelization, right? And with Sony's Triluminus technology, with our X-Reality Pro technology, our Motion Flow technology, which consumers don't really care about the technology. But what it does is it gives you lifelike colors. I mean, you can see this face is clear as day. Yeah. And in 4K- I'm just gonna put this on my face. We're actually doing this for 80 people. That's where I was going with mine. But thank you for picking that one up, for upscaling as well. So with our 4K televisions, anything, any content, 4K high definition looks better. Right. But I think that there's, but your partners yesterday that you announced were Netflix, YouTube, 500pix, ESPN. Those are all internet delivery services, right? Is that how it's gonna, I mean, I see that as being a huge disruptor to the industry, right? There's classic television, which, you know, Fox is still 720p, right? They're not gonna make the jump in broadcast to 4K tomorrow. You're not gonna get a football game in 4K tomorrow. You're gonna deliver it over the internet. But football game is interesting, because I also spoke a little bit about R55 cameras, right? Which are 4K broadcast cameras that are shooting content in 4K, but it's not all being delivered back 4K. So with 4K, you're getting four times the resolution. You're getting more information. So instant replays for sports, you can actually see more content. You see more data, more information. And they're doing that, right? They're doing the big zooms, right? So there's multiple applications. It's very different than possibly 3D, right? There's multiple applications from the production and distribution side as well, whether it's TV, Blacklist, very popular TV show is being shot in F55 cameras. We talked about Hulu is using our cameras. We brought on Reed Hastings last evening. Yeah. He's everywhere. Yeah. But what did he say about the Sony relationship? He talked about our televisions, and these were his words, that our televisions had the fastest response rate when he looked at delivery of content, 4K content to the television. So he's a creator and a distributor. So that was a very big announcement. But when I say he's everywhere, Netflix is sort of the key, right? They're the major content service that everybody has that will deliver 4K first. And that, to me, that's internet delivery. So I look at a Sony 4K TV, and the first thing I think is, well, now that Netflix is 4K, this will be useful to me. Is that how you think of it, too? Obviously, you guys run your own service, but Netflix has such broad appeal, and everybody already has it, that they're buying the TVs and they can turn it right on. Is that how you're thinking about distribution of content, or are there other pieces? Yes to both. Okay. So what we're thinking about is, you know, Kaz, again, talked about condo and emotion and wow. We're thinking about the passions, consumers' passions. Passions are music, passions are watching video, passions are, I talked about action cam and extreme sports, right? So where there's a consumer passion, how do we deliver that in a more immersive, exciting experience? So if you think about it from TV viewing, whether that's watching TV shows or whether that's streaming through Netflix content from your Netflix account or streaming through Sony Entertainment Network, or we talked about gaming today at the keynote, whatever the passion is for the consumer, how do we make it not only accessible and easily delivered into their home or on the go, but also of the highest quality? And I don't want to underestimate our desire to provide highest quality, because that really gives you the best experience. Right. And you know, you announced, the quality thing to me, I made a joke during the live log, I'm going to admit it to you. You were announcing high-res audio and I made a comparison to SACD, which was a Sony super audio CD that was announced and all the artists loved it, the music industry loved it, and it went nowhere with consumers. And now you've got high-res audio, which you're doing up sampling of compressed audio, you've got kind of reference speakers and systems. Is that different? I mean, tell me why that's different than other high-end, because I know consumers are buying crappy headphones because they like the way they look, right? They're listening to them on phones that maybe don't have the best audio converters in them, and you're saying, well, you've got to step up to this next generation of audio. Our replacement headphone business is great because it's one of those crappy headphones. But what's different here is there's a number of things different. One is it's industry-led, so there are other leading audio companies jumping on board. And two, it cuts across different lifestyles, different life segments, so it's premium quality audio for an audio enthusiast, but it's also better quality audio from a point of view of MP3 or access to tracks, right? So we're hitting all the generations. Audio is a passion across all generations, and we're providing products to them that are meaningful and relevant to how they live their life. So it's not a box in a room. It's meant for whatever application, whatever lifestyle that consumer uses. So we're all excited about high-res audio. The artists, as you said, are real excited. Last night I talked about Say Something with Christina Aguilera. And is this something you guys can do because you happen to have Sony Music on the back end? I mean, does this like, you know, Kaz always talks about one Sony, right? You've got all these divisions. Is this something where you've worked with them, or did you just present it to the industry? How does that kind of work when you want to develop products? We work really closely internally, even though we're separate entities. Internally you would never know that. We collaborate and work really well together, but we're also understanding that, you know, customers want choice and they want assortment. So we don't limit it only to Sony entities. But we can start a lot of good initiatives and really move things from an industry point of view and lead because of that, because of those components that we have, right? So it's imaging, gaming, music, television, movies, content, devices. So do you think consumers are going to, you know, I think the disruptive thing that happened in audio was convenience, right? And the Walkman was kind of the first iconic piece of convenient audio. And then the quality went up. And then obviously MP3 came and iTunes came and convenience exploded, right? And then Sony's been coming back and back. And now you guys make phones that are obviously, they do music playback. What's the next big disruptor in audio? Do you think it's high res or is it something else? I mean, does that have the same power or do you think consumers are going to stay with convenience over quality? Well, I think, I don't think you can separate them. I think it's got to be both, right? So, you know, we're putting all of our core technologies that have made the best quality televisions, cameras, audio devices now into our smartphones. And this is the actual smartphone that Kunimasa presented last night, Kunimasa Suzuki, the Z1S, which will be available through T-Mobile in the United States. And this has all of our core technologies in it. So it's got the highest quality apps that you want to use, whether it's imaging or music listening, but it makes it convenient, right? So it's convenient on the go. And when you're in your home or you're in your favorite room, we've got products that are compatible that you can sit and put on a pair of headphones and enjoy high res audio in your space that you desire. So what's interesting about that phone is that it's sitting next to one of your cameras. And this, you know, phones, particularly your phones have excellent cameras in them, right? And lots and lots of, the industry's figured out that excellent cameras in cell phones are differentiated, it sells a lot of products. How do you, that's your new Alpha. This is the A5000. You've rebranded it from Nexx. What's going on there? So, you know, we're building, we've had tremendous success with Alpha. We had tremendous success with the NEX5 and the 3 and 6 and so on. But we're trying to come up with a branding that consumers can really, you know, get on board with. And they've really got on board with Alpha. More so than Nexx? I don't think more so, but it's time for us to bring it together as a single brand because it speaks to the capability of the product. So it used to be an Alpha, it's where your DSLRs were, right? And these were your mirrorless. That's right. And now they're just kind of... Yeah, and when we got into the DSLR business, we got into it with the Alpha brand. And now we've integrated the imaging into one we call Alpha or A series. And this is a sweet camera. This is the A5000. I showed this last evening and this is about a $600 retail. So it's an affordable camera, but it's just jammed with technology and features. It could be professionals... It's the lightest, the world's lightest APS-C camera. So it can be a professional's dream for them to go. I know a lot of journalists who use the NEX3 as their go-to. Also for the casual user that wants to step up their game. So it's affordable. But my question is, is that the future of sort of Sony imaging, right? These kind of step up bigger lenses, bigger sensors, because this is killing you. The phones are killing your point and shoot market, aren't they? So yes, bigger sensors, better quality is where we stand. But don't forget, I didn't bring it. I should have brought it. Don't forget we had the QX lens style camera, which for a camera company is disruptive. We make digital DSC cameras, point and shoot cameras. We make handicaps, 4K, we make alpha, moving from NEX to the A-series. So there are times when disruptive matters and it's something you should embrace rather than hide from it. So do you see that as a companion to sort of a phone? When you're looking at somebody who has a great phone camera, how do you sell them? Feel how light that is. It's great. I mean, I'm a camera nerd, right? It used to be that you had a flip phone and you needed a camera, so you went and bought a Sony point and shoot for $249 or $349, right? Now you've got a pretty great camera on your phone. Or you could buy a Sony phone, right? How do you tell the consumer that they need this as well? Because this is really convenience and access, you were talking about earlier about accessibility and convenience. So you're going to get really great photos off of the Sony smartphones. But when you're really trying to get into different viewing angles and different effects and really taking photos around the passion of photography, this is the beginning of a camera you want to get into, right? And then you really go to a whole other level when you get into it. And then you're the camera nerd and you buy a new camera. This happens to me. Sure, thank you. So it's working. I'm doing what I can. We appreciate that. I'm a big supporter of Sony. You've got a lot of my money. We have so many products for you to buy this year. And actually, I want to talk about that a little bit. You guys announced a lot of products yesterday. And then Kaz had a keynote today. He announced some more products. What I'm missing, and we talked about this a little bit before we went on the air, what I'm missing is Sony used to have Spectacle. You used to have Taylor Swift and Sparkles. And you were in charge of that. And then you guys have made a decision to really focus and just announce products. What is that prep period like for you as you decide what you're going to do at CES? So this year, we're really looking at focus on the consumer. We've always been focused on the consumer. But the wow factor that Kaz is talking about is what we're delivering in technology that makes a motion with the consumer. So we have a music company. We have a television company, a pictures company. So we can bring artists. And you saw Kaz's keynote. We brought Vince out. And that's great. But unless the consumer can actually get that feeling through what we're delivering to them, then it just becomes Las Vegas on a show. So really, what we're focused on. We do have a lot of new products, but they're very focused. Focused around 4K for quality and premium and immersive. Focused around high res for getting those sounds, that music, the way the artist intended it to be. Focused around imaging to really give consumers that ability to feel, get the emotion out of their favorite photos and really step up their game from just point and shoot. So it's really built around very distinct passions and then going deep within those passions. Content is king. I said it last evening. And we'll continue to bring artists out and bring films out. But the delivery of them to the consumer, ease of access and interoperability, is really what we're focused on. And hopefully you saw that through last night's presentation. Yeah. I mean, next year you've got to bring Taylor Swift back. That's a promise I want to hear from you. I just look funny standing next to him. So one last question. This is a rapid fire round. I've been told we've got to wrap up here. You're a busy man. And it's just kind of a random one. It's a throwaway. You cannot answer if you want to. But when do you think mainstream adoption of 4K will come? What's your timeline? Because this is kind of the first wave of it's all going to happen. But it's not this year. Well, it's not this year. Although, I was around 29 years. We were around for a couple of paradigm shifts. I was around for HD adoption as well. And we're seeing 4K adoption much faster than HD. And this is not- Inside of 5? Oh, sure. Inside of 3. And when do you think prices will hit the mainstream price points? As mass adoption occurs, there'll be efficiencies of scale. You're going to see this year more affordable products in the market, a broader line of products in the market. But again, caution the consumer. Understand what you're buying. Do your research. Go out. Get an experience, a demonstration at retail before you make the final purchase. Because there's 4K panels that are true 4K panels, but they're not going to deliver the same experience of a brand like Sony that puts all of the engines and technology behind it beyond just the panel. Cool. We didn't get any time to talk about the 4K handicap. Well, I'm just going to take this. We're going to talk about it later. So I was hoping you would notice it's still here. 4K for 2K. That's your line? That's my line. 2,000 retail in 1999. And you're looking at- But it wouldn't sound good, 4K for 1999. 4K for 2K is not bad. This is for, I think you said, beginning filmmakers, students, hobbyists. Yeah. I mean, you can use this to film festivals. You can use it for recitals, weddings, vacations. It's a phenomenal camera. It shoots in 4K. It can shoot in HD. Surprisingly small compared to last year's. And it's got a one-inch CMOS sensor in it, which again is a larger chip. And I believe, I can't think of another camcorder that size with that size chip in it. So it's full of great technology at an affordable price. You're going to leave it here with me. For a few minutes. I'll see how long this lasts. Well, Mike, it's been great to have you. Thank you so much for being the first to interview us. Pleasure. We look forward to many more. Yes. And enjoy your class. You too.