Reports: Sony Reaches Preliminary Deal With Viacom On Internet TV Service

(RTTNews) - Japanese consumer electronics giant Sony Corp. (SNE, SON.L) has reached a preliminary deal with Viacom Inc. (VIA, VIAB) to carry the media conglomerate's cable channels on Sony's planned Internet-based pay TV service, according to media reports on Thursday.

Sony reportedly plans to stream traditional cable channels as well as on-demand content over the Internet to televisions, game consoles and Blu-ray players. Viacom, the owner of MTV, Nickelodeon and Comedy Central, has more than 20 channels.

Sony's Internet-based TV service would let paying subscribers receive live cable channels as well as enable the company to sell Viacom shows and movies on demand.

Intel Corp. (INTC) and Google Inc. (GOOG) are also reportedly planning Internet-based TV services and are searching for programming rights. However, these plans could pose new competition to cable, satellite television and phone companies that sell subscription TV services.

According to media reports, Sony is yet to execute a definitive agreement with Viacom. The company is also said to have talks with major programmers including Walt Disney Co. (DIS), Time Warner Inc. (TWX) and CBS Corp. (CBS), but the status of those talks were not clear.

However, programmers are wary of reaching deals with Internet pay TV providers, and alienating their biggest business partners such as satellite and cable companies in the process.

Sony is reportedly hoping to launch its online pay-TV service by the end of the year or the first quarter of 2014. The service is initially expected to be available via Sony's PlayStation gaming console and Bravia high-definition televisions, but might later also be available on other Sony devices including tablets and smartphones.

SNE closed Thursday's regular trading session at $19.86, down $0.22 or 1.10 percent on a volume of 1.79 million shares. VIA closed Thursday's trading at $78.63, down $1.33 or 1.66 percent on a volume of 18,614 shares.