Until now Sony's movie store for the PS3 has only been available in the US. In Europe SCEE has historically adopted the strategy of partnering Pay TV operators to supply content for the PSP, forming alliances with Sky in the UK and Ireland and Canal Plus in France. However, Screen Digest believes that movie consumption through these stores (branded Go! View) has been low to date.

A store for the PS3 is likely to find more success than Go! View as it will have the advantage of being directly integrated into the PlayStation Network interface and, more importantly, it will allow users to easily view content on the TV screen. Consumption patterns may mirror those seen in the US where 65 per cent of transactions are retail and just 35 per cent are rental.

With the exception of Spain, the markets which Sony has chosen to enter are characterized by the existing presence of at least two major online movie services in each case. Apple dominates the digital retail market in Germany and the UK thanks to its device-centric strategy and the ease of use of the iTunes store. In the online movie rental market Sony will be competing not only with Apple but also with Microsoft's Xbox Live Video Marketplace. Microsoft rolled out its movie store in Europe in December 2007. Following a service upgrade in November 2008 consumption has grown substantially, particularly in the UK where Screen Digest believes Xbox currently leads iTunes in terms of rental market share despite offering a much smaller content selection.

With a greater number of active consoles in three of the four territories Sony could develop into a strong competitor to Microsoft in these online movie rental markets. However, SCEE's video strategy lags behind that of Microsoft who are planning further improvements to their service later in 2009 such as adaptive bitrate streaming.

Between them Apple, Sony and Microsoft are set to command a strong hold on transactional online movie markets in Europe. However, it is worth noting that for all three companies the sale of online movies is not designed to be a core profit centre; margins on digital movies (particularly new release digital retail) are low. The availability of a digital content store helps to drive Apple's higher margin hardware sales while for Sony and Microsoft the target is even further removed – by positioning the console as an entertainment hub manufacturers hope to sell more consoles which will in turn drive lucrative software sales.

In this context, where high movie sales volumes are not the ultimate goal for neither Microsoft nor Sony, the most significant announcement concerning online video from either manufacturer has perhaps been Microsoft's partnerships with Canal Plus and Sky to deliver the pay TV operators' content to Xbox 360 users. These deals may prove key in helping Microsoft to broaden the appeal of the console beyond the traditional gaming audience. The roll out of these services at around the same time as Sony only begins to launch its video store in Europe emphasises the difference in pace between the two manufacturers in the race to deliver video to the TV screen.

SCEE's relationship with the same two pay TV operators began over twelve months ago with the launch of Go! View and the failure to extend this content partnership to the PS3 prior to Microsoft's planned Autumn 2009 roll out represents a significant missed opportunity for Sony's video ambitions. However, Microsoft has not disclosed if its deals with Sky and Canal Plus are exclusive and it would not be surprising if Sony forms similar partnerships in the future.