Sony unveils streaming TV service PlayStation Vue

Sony Playstation 4
Chesnot | Getty Images

Sony has unveiled its PlayStation Vue streaming video service, announcing pricing, and launching in three cities—New York, Philadelphia and Chicago for PS3 and PS4 users.

Once the service rolls out nationwide—expected by the end of the year—Sony will target the roughly 35 million console owners who are at risk of cutting the cord with traditional cable TV, if they haven't already.

There are three pricing tiers. The basic "access" service is $49.99 for 50 popular broadcast channels; the next tier is $10 more for the basic package of channels plus local sports; and the "elite" service is $69.99 for the core service plus lifestyle, music and family channels, including CNBC World and Cooking Channel. But what distinguishes this TV-over-the-Internet service are the advantages of storage in the cloud.

"The main thing that we've heard from the PlayStation consumer is that they enjoy and watch a lot of TV, but they get frustrated because even with a lot of content available it's really hard to find what they want to watch, when they want to watch it," Sony Computer Entertainment chief Andrew House said in an exclusive interview.

"[By] leveraging the powers of the PlayStation platforms, and a really slick and new interface, we think we're going an awfully long way to solve that challenge," House said.

Read MoreApple's TV service could fuel more hardware sales

Once viewers tag a favorite show they'll have access to all episodes for 28 days, and there are no storage restrictions or scheduling conflicts. The company says that part of its appeal to younger consumers in particular is that there are no added fees, no contractual commitments—consumers can go month to month—or penalties for canceling. With a single account, users can simultaneously stream on up to three consoles in the same home. And the company says it's as easy to use as downloading an app.

House says the product is tailored to PlayStation users who are already paying for broadband access. "I think what's really key is that they are the kind of consumer that is either at risk of cutting the cord, or has already done so," House said. "We think that by offering them a pricing structure that has no commitments, that has purely month to month offering them no hidden fees, …. we think that's a pretty compelling package for that audience."

House said he doesn't see Sling TV's over-the-top streaming service, which starts at $20 a month, as competition, because it has a more limited channel offering.

As for Apple's new streaming service in the works, to launch the second half of the year? House wouldn't comment specifically, but said he's not concerned. "I think that competition, different approaches to how we let consumers access content, can only be good for the market," he said.

"I'm not unduly concerned about an overly competitive landscape. I think TV is ripe for revolution and we want to be a really strong part of making that happen."

Read MoreWill cord-cutting really be a better deal than cable bill?: CNBC Explains