Viacom Agrees To Breakthrough Deal To Provide Channels To Sony’s Online Pay TV Service

UPDATE, 10:40 AM: Viacom CEO Philippe Dauman declined to offer key details about his Sony deal — including the price of its Internet video service and launch date — when quizzed about it today at the Goldman Sachs Communacopia conference. It’s up to Sony to disclose, and “they’ll announce with a lot of fanfare and marketing,” he says. An Internet pay TV service  “will give consumers more of what they want” and will make others say “gee, we need to do better.”  The Sony service will go to its base of customers who have PlayStation game consoles and its smart TVs. That makes Viacom’s networks such as MTV and Nickelodeon important: Young viewers are “spending a lot of time on gaming devices.”

PREVIOUS, 7:35 AM: This is a big advance for Sony’s plan to offer pay TV channels via the Internet by the end of this year, which it announced in January. Viacom’s agreement to offer its 22 channels outside of cable and satellite is its “first-ever agreement to provide its networks for an Internet-based live TV and video on demand service,” it says this morning. In addition to popular services including BET, Comedy Central, MTV, and Nickelodeon — all in HD — Sony will be able to offer customers access to Viacom’s TV Everywhere websites and apps as well as its full VOD package. The companies didn’t disclose financial terms, although I suspect Viacom CEO Philippe Dauman will face some questions about this later today when he appears at the Goldman Sachs Communacopia conference in NYC.

“Viacom always strives to create transformational opportunities that combine consumer value and technological innovation,” Dauman says. “Given our young, tech-savvy audiences, our networks are essential for any new distribution platform, and we’re excited to be among the many programmers that will help power Sony’s new service and advance a new era for television.”

Sony Network Entertainment Business Group Executive Andrew House says his still mysterious online service will “combine the live TV content people love most about cable with the dynamic experience they have come to expect from our network.” U.S. living rooms have more than 75M Internet-enabled Sony devices. The company says that it will offer its online customers “live TV and video on demand from major programmers” including Viacom. It will provide additional info about the new service “in the near future.”

Dauman said late last year that there was a “strong chance” that someone would offer a pay TV service via the Internet by the end of 2014. Programmers’ main concern is that a national online service could undermine their ability to sell their channels in bundles that require people to pay for ones that they don’t watch.  In addition to Sony’s effort, Dish Network plans an Internet offering that would provide some, but not all, pay TV channels at a lower price than consumers typically pay — but only offering one channel at a time. Verizon also is working on what’s known in the trade as an over-the-top (meaning: not using cable or satellite) service.

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