Sony to Carry Viacom Channels on its Internet Pay TV Service

Sony may have just moved ahead in the race to create an online version of pay television, thanks to a preliminary deal with Viacom to carry channels including MTV, Comedy Central and Nickelodeon via its planned pay TV service. Competitors in this space, such as Google and Intel, have yet to land such a major content deal. Sony hopes to launch an Internet service next year — streamed to its Bravia TVs and PlayStation gaming consoles — that will compete with companies that sell subscription TV services.

Sony is one of several tech giants with plans to stream cable channels and on-demand programming over the Internet, offering consumers an alternative to popular on-demand services like Netflix and Amazon.

According to people familiar with the matter, Sony still has to finalize details of the deal with Viacom. Sony is also reportedly in talks with major entertainment companies including Disney, Time Warner and CBS Corp.

“While Sony would need to strike other programming deals to create a compelling alternative to conventional pay TV services, even a single deal represents a big shift within the entertainment industry,” suggests The Wall Street Journal. “Big channel owners have been reluctant to license their programs to Internet TV services for fear of undercutting the lucrative arrangements they have with cable, satellite and phone companies.”

According to those who have seen it demonstrated, Sony’s service includes a feature that recommends TV shows based on an algorithm and recommendations from content providers. It also features a highly graphic, easy-to-use interface superior to the programming guides currently offered by distributors.

Intel is also said to have a slick interface. The company, which plans to roll out its own service by the end of the year, will offer a recording system that stores aired programs in the cloud for three days, eliminating the need for a home DVR.

“Media companies typically charge higher prices to new entrants than they do to established distributors,” notes WSJ. “TV channels typically get paid on a per-subscriber basis, but media executives say they would be likely to seek a minimum revenue guarantee in online TV deals in case Sony or Intel don’t build a large subscriber base.”