Sony Inks Tentative Pact With Viacom for Internet TV Service: Report

Pay TV biz, which is showing signs of strain because of fast-rising programming costs, is being mobbed by new entrants eager to grab a slice of the pie.

Sony is aiming to launch an Internet video service to rival cable and satellite services by the end of 2013, and has reached a preliminary agreement with Viacom to carry the media company’s cable networks, the Wall Street Journal reported, citing an anonymous source.

Sony, if it’s able to pull a critical mass of content deals together, would join the over-the-top fray along with Intel, which has been public about its own over-the-top TV service and has claimed it’s on track for a launch later this year. Google and Apple also are reportedly investigating the feasibility of launching such services.

Initially Sony plans to stream traditional live TV channels and video-on-demand content to its PlayStation gaming console as well as Bravia HDTVs, according to the Journal. In the future the broadband TV service would work with other Sony devices including tablets and smartphones.

Sony and Viacom declined to comment on the report.

But an agreement in principle doesn’t mean Sony is good to go with Viacom, whose cable properties include Nickelodeon, MTV and Comedy Central. For example, Intel Media has struggled to close deals with major programmers even as it is offering to pay a premium for the content.

While Sony has also held talks with media congloms including Walt Disney Co. Time Warner Inc. and CBS the status of those discussions isn’t clear, the Journal reported.

At a Variety conference last year, Michael Aragon, VP and GM of global video and music at Sony Network Entertainment, confirmed the company was considering offering TV over broadband. However, according to the exec, Sony was waiting

“We do believe there’s a business model out there,” said Aragon at the Variety event. He referred to “catch-up TV” services overseas as a potential model for a Sony service, saying, “If we can get that, that’s certainly a differentiator that can make the economics work.”

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