Sony to raise its online game

Sony insiders say attitudes are evolving under Tim Schaaff, a former Apple executive who is spearheading the company's latest plunge into online video. Schaaff joined Sony in December 2005 in the newly created position of senior vice president of software development and is helping the company, whose heritage dates to the transistor radio, appreciate the importance of deft software design in the digital era.

Online movie sales are still a tiny business and will remain small over the next year as DVDs continue to be the dominant home video format, according to Convergence Consulting Group. U.S. consumers spent $95 million for movies online last year, compared with $23.4 billion to rent and buy DVDs.

Nonetheless, market researcher Parks Associates projects that Internet video will grow more lucrative, reaping about $6.4 billion in revenue by 2010 from advertising, as well as paid downloads or rentals.

In the market, however, Microsoft has a head start.

"It isn't easy to do this," said Ross Honey, senior director of Microsoft's media and entertainment group.

"There is a lot of work to be done in just making this work and getting that movie up in high quality. We've had over a year's experience on how to do this, so we can focus on innovating as opposed to working out the kinks."

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dawn.chmielewski@latimes.com

alex.pham@latimes.com