Sony, Viacom Strike Streaming Pact

The Wall Street Journal reports that Sony Corp. has reached a "preliminary deal" with Viacom Inc. to distribute the programmer's channels as part of a new Internet-based television service.

While numerous other big-name companies -- including Intel Corp., Google, and Apple Inc. -- are hard at work prepping their own online offerings, the Viacom news is the first indication that major content owners are willing to participate in the over-the-top (OTT) pay-TV revolution. (See Google, Apple Pitch Pay-TV Services.)

Sony is reportedly holding discussions with other media companies as well, including Walt Disney Co., Time Warner Inc., and CBS Corp. The consumer electronics giant also has its own content assets to mine, thanks to the Sony Pictures Entertainment subsidiary. Sony studios produce popular TV shows like Breaking Bad and Justified, along with high-budget Hollywood movies.

The licensing agreement with Viacom, if it materializes, would be a landmark deal in the feverishly competitive pay-TV market. It could also set off a firestorm among cable, telecom, and satellite TV companies anxious to protect their television turf.

Time Warner Cable Inc.has already been cited for creating contractual clauses that bar programmers from licensing their content to new online service providers. The US Justice Department is examining the competitive impacts of such backroom negotiations. (See Cable Operators Show Them the Money.)

Sony hopes to launch its new streaming service early next year on the Sony PlayStation. The company would then extend the service to Sony smart TV sets and other Internet-connected devices.

— Mari Silbey, special to Light Reading Cable

KBode 8/16/2013 | 2:53:23 PM
Re: Wonder if Viacom Will Get Stingy on the Details? Right. I assume they're cordon it off so that it's only available to $50 a month Playstation Plus subscribers, then whatever the service costs ($30 or more) because Sony had to pay an arm and a leg for the honor. The licensing restrictions won't allow real freedom in pricing because that would challenge traditional cable, so all you wind up with is an expensive service with a limited catalog most won't be willing to give up traditional cable for.

Hopefully this winds up as something different, but I think we've seen enough companies run face first into this wall to know real disruptive services and pricing are still a long way away. I will stay I still like the game console folks if we're betting on who is the first to really cause disruption...

(excellent read BTW).
msilbey 8/16/2013 | 1:32:26 PM
Re: Wonder if Viacom Will Get Stingy on the Details? Agreed about it being a crack in a very giant wall.

I can't imagine the money Sony must be paying for this, which in turn makes me wonder about the price of the service. It's going to be very difficult to walk the fine line between offering enough content to entice consumers, and doing it at a price that doesn't make them give up on pay-TV altogether, or turn back to cable. It's the same difficult equation as always.

KBode 8/16/2013 | 12:23:07 PM
Wonder if Viacom Will Get Stingy on the Details? That's some very welcome progress, but it's kind of like a crack in a giant, giant wall. Still, progress is progress, right?

The Journal notes that the real details of the agreement are still pending. I wonder if that means Viacom will foist Sony to offer all of their channels at once in a bundle, or none at all (in the exact same way they do with cable operators)?

Having Viacom and Sony content alone isn't a bad lineup, but you have to think that others like CBS are going to treat Sony's idea the same way they've treated proposals from Intel, Google, Apple, and every other company that would love to really disrupt this sector but can't climb over the giant licensing wall built to protect it.

Having cancelled cable two years back, I'm first in line for this kind of service if it gives me at least some flexibility in channel lineup.
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