Why Did Sony Get First Dibs on Viacom Content?


Any company trying to advance an Internet TV model has to start by connecting with a young audience, one for whom an alternative to the Tube would seem natural, even inevitable. That company would then be wise to involve its growing audience with products that go hand-in-hand with screen-watching and television-style interaction. By having televisions, smartphones, tablets, and video-game consoles sporting its brand name, Sony (NYSE:SNE) would appear to have a clear advantage in this fight.

Apparently, that is how the media companies see the situation, too. Viacom (NYSE:VIAB) has reportedly agreed to give the tech giant — also known for producing hit shows — the right to carry networks like MTV and Comedy Central on a forthcoming pay-TV service on the Internet. The Wall Street Journal is reporting the two have reached a deal that would bring Viacom’s coveted content to Sony devices everywhere.

Viacom, the media giant with “The Daily Show” as well as MTV and all Nickelodeon programming, may see a strategic advantage in a company that has its PlayStation devotees already sitting on the couch, as well as customers who long ago trusted the quality of the company’s television sets. The popularity of its tablets and Xperia smartphones won’t hurt, either, as viewers access content on an increasing number of devices.

According to the Wall Street Journal report, media executives were most enthusiastic about the gaming enthusiasts who are parked in front of television screens on their PlayStation 3 consoles, of which more than 24 million have sold in the U.S. The news outlet also mentions a feature of the deal that would allow Viacom to suggest shows for viewers based on their history, giving the content provider a hand in marketing.

This feature, familiar for users of Netflix (NASDAQ:NFLX) and other sites, gives Viacom a chance to reach the owners of Sony products while earning off the content deal with the company, according to the Wall Street Journal report. Though financials details of the deal have not been quoted, Sony as the company entering the fray (and getting the first shot at a content deal) would have to pay a premium for this material.

Companies on the hunt for deals of this kind — including Intel (NASDAQ:INTC) — have yet to make such a significant move in the field that is expected to explode in the coming years. As a Bloomberg report on the deal noted, the acquisition of premium content would fit in nicely with the plans of Sony’s chief executive, who hopes to get every aspect of the entertainment and tech giant under a “One Sony” umbrella.

Sony has had a disappointing year in terms of box office performance in its film division, but there is no shortage of high quality shows under the Sony Entertainment banner. Among them is the wildly popular “Breaking Bad,” which has been discussed as one of the best shows in television history, succeeding to have spin-off shows on AMC (NASDAQ:AMCX) dedicated entirely to the discussion of the show’s happenings.

Adding a show of that stature to programming like “The Colbert Report” and “Ridiculousness” would give Sony an intriguing lineup to continue boosting the popularity of other entertainment-division offerings. For now, it has fired an impressive first salvo in the Internet TV race.

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