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OMG! Sony is challenging Apple to a video-download service duel! Howard Stringer, Sony's CEO, has a novel plan to use the PlayStation 3 as a trojan horse into the living rooms of America — supplanting the struggling Apple TV. Please. The only thing shocking about Sony's service is that it took the company this long to sort things out. And that's not particularly shocking, since this is Sony we're talking about — the conglomerate that couldn't coordinate its way out of a paper bag. The surprise is not that Sony has a video-download service in the works — it's that Sony management feels confident enough about the effort to spoon-feed a story to the Wall Street Journal about it. Here's the back story that the Journal didn't bother to provide.

When Microsoft announced its Xbox Live Marketplace for the Xbox 360, which offers television and movie downloads, last November, it was only a matter of time until Sony felt compelled to offer a similar service for its PlayStation3. As a movie studio owner, Sony even had, arguably, an advantage. Its inability to beat Microsoft to market was baffling.

The PlayStation 3 has always been marketed as a computer for your living room — the digital hub for family entertainment. This announcement is simply Sony fulfilling on its marketing promise. What's more, the timing sets Sony up for the holidays. Sales of the PlayStation 3 have lagged compared to Microsoft's Xbox 360 and Nintendo's Wii. Sony recently dropped the price of its 60GB console by $100 to spur sales and clear out inventories. And it's also finding that its early dominance in Blu-ray, the high-definition movie-disc format built into the PS3, losing ground to HD-DVD.

This announcement, more than anything, makes PS3 look something like the wunderkind device Sony originally promised. Something that plays Blu-ray movies, games, and can download TV shows. Suddenly an overpriced console looks like the deal of a century. By tying digital downloads to the PS3, Sony hopes to generate some much-needed console sales, and in the process getting its hi-def movie player into more homes. But confusion over its strategy — and the complications of a failing, now-shuttered music-download service — slowed things down. Sony may claim to be moving faster now. But it can't hide the fact that it's far, far behind Microsoft and Apple in this race.