×

Viacom-Sony Revelation Reeks of Hidden Agendas

Sumner Redstone's timing seems awfully suspicious

If the pay-TV universe can be thought of in terms of world wars, we may have just witnessed the assassination of Archduke Franz Ferdinand of Austria. The planet didn’t know it at the time, but that 1914 shooting essentially precipitated World War I.

Standing in for the archduke almost a century later is a reported pact that will see Sony Corp. license the collective cable channels of Viacom for a new broadband-delivered TV service expected to launch by the end of the year. If this deal is real, the entrenched triumvirate of cable, satellite and telco distributors have essentially received a declaration of war from what may be just the first of a new breed of challengers that could include Intel, Google and Apple.

But it’s a big “if.” Not only are neither Sony nor Viacom officially acknowledging the pact, but Sony has yet to utter a word of confirmation that its virtual-MSO service even exists. Google and Apple’s own TV plans are far from concrete; only Intel has been public about its intent, which hasn’t scotched doubts that the chipmaker will actually make it to market.

However, the vaporousness of this long anticipated challenge to pay-TV hegemony may mean there’s ulterior motives behind why we are seeing the Sony-Viacom deal floated at this time.

Consider the common corporate parentage of Viacom and CBS Corp., which both count Sumner Redstone as the chairman of their respective boards. CBS is currently embroiled in a nasty multi-week standoff with Time Warner Cable over the terms of their affiliate deal.

What better way for Redstone to remind TW Cable that MSOs aren’t the only game in town than for one of the biggest content companies to throw some weight behind a new market entrant. By giving just a whiff of substance to the possibility that Sony could get in the game, Redstone is warning TW Cable that it has the power to create a new competitor for them.

The cable operator probably isn’t even the only negotiator Redstone is sending a message. Consider Intel, which has seen its own vow to bring its OnCue service to market by year-end compromised by an inability to lock down a single programming deal.

Of course, Viacom is going to do everything it can to squeeze every dollar it can out of Intel for the rights to its channels. And what better way to put some pressure on Intel than to make it seem like another company with a similar service is making headway.

All this maneuvering and breathless anticipation might lead one to believe that Sony or Intel or whoever is going to launch something so revolutionary that incumbents like TW Cable will instantly crumble to dust. Hardly.

For one thing, there’s plenty of other programming companies beyond Viacom that Sony will need to get on board. And even if that happens, the basic “bundle” structure of pay TV will remain intact, though it’s a good bet you will see more options as to what packages of channels can be bought. But a la carte simply isn’t going to happen anytime soon.

And if you’re hoping Sony or Intel will be able to undercut the incumbents on price, that’s also highly unlikely. The price to get into the game with premium programming is going to be so exorbitant that there is no way those costs won’t be passed on to consumers.

So before saluting the dawn of a new era in pay TV, consider that a Sony-Viacom deal may not really be an opening salvo. What may seem like a wake-up call could really be a false alarm.

More Biz

  • Bert Salke and Jennifer Salke

    Feds Looked Into Amazon Studios Chief Jennifer Salke in College Admissions Scandal

    Federal investigators looked into Amazon Studios chief Jennifer Salke and her husband, Fox 21 Television Studios president Bert Salke, as they conducted a sprawling probe of cheating in elite college admissions, a source close to the case told Variety. It does not appear, however, that prosecutors will charge the Salkes in the case. The Salkes [...]

  • Variety Cord Cutting Placeholder Cable

    Big Blackout Looms as CBS, AT&T Go Down to Wire on Renewal Talks

    A blackout affecting CBS stations in major markets throughout the country looms as CBS and AT&T executives go down to the wire on negotiations for a retransmission consent deal covering 28 O&O stations. The sides have sparred publicly during the past few days as 11 p.m. PT Friday expiration of the previous contract approached. AT&T [...]

  • Contract Placeholder Business WGA ATA Agent

    ICM Responds to WGA Packaging Lawsuit: Claims are 'Baseless' and 'Absurd'

    ICM Partners has asked a judge to dismiss the lawsuit filed against four major talent agencies by the Writers Guild of America as part of the larger war between agencies and the guild over packaging fees on TV series and movies. The guild sued ICM, CAA, WME and UTA in California state court in April, [...]

  • New York City NYC Placeholder

    CityFM Podcast Takes a Deep Look at New York’s Music Scene (Listen)

    First among the many projects listed at the beginning of New York Music Month in June was a WNYE radio show and podcast called CityFM that promised to “explore the city’s music culture, emerging artists and trends, and upcoming events told through the lens of what’s happening around the city in Summer 2019.” And while [...]

  • Live Nation Logo. (PRNewsFoto/Live Nation)

    Live Nation Confirms Placing Tickets Directly on Secondary Market at Artists’ Request

    Representatives for Live Nation, the world’s largest live-entertainment company and owner of Ticketmaster, confirmed that it bypassed conventional channels and directly placed thousands of concert tickets on the secondary market upon artists’ request, in an article published in Billboard. In a statement shared with Variety, the company acknowledged that it has facilitated the transfer of [...]

  • Costume designer Michele Clapton

    Costume Designers Fashion a Plan to Fight for Pay Parity in Upcoming Contract Talks

    The Costume Designers Guild Local 892 is gearing up to fight for pay equity in its 2021 contract negotiations with the Alliance of Motion Picture and Television Producers, establishing a pay-equity committee to raise awareness of the scale disparity between the mostly female CDG membership and the mostly male membership of the Art Directors Guild Local [...]

More From Our Brands

Access exclusive content