Sony Corporation (NYSE:SNE), which is vying to develop a new model of online pay television, reached a preliminary deal with Viacom Inc. (NASDAQ:VIAB), to carry the media giant’s popular cable channels, including MTV, Comedy Central and Nickelodeon, on its planned Internet pay television service, the Wall Street Journal reported on Thursday, citing sources familiar with the matter.
Sony has achieved a major breakthrough with the agreement, as other companies involved in launching online pay television, such as Intel Corporation (NASDAQ:INTC) and Google Inc (NASDAQ:GOOG) are yet to land similar deals for popular content.
The online version of pay television is expected to offer more choices for customers and pose new competition for cable, satellite and phone companies, which give access to television channels through subscription-based services.
Sony is expected to launch the service early next year and would link its new service to Sony devices, including PlayStation gaming consoles and Sony TV sets, the Journal reported.
The Japanese company is also involved in talks with other major television content providers, including The Walt Disney Company (NYSE:DIS), Time Warner Inc (NYSE:TWX) and CBS Corporation (NYSE:CBS), the Journal reported.
Viacom’s willingness to provide content through an Internet-based pay-for-television model is seen as reflective of changing attitudes among television content providers, who have been skeptical about online models and fear they could undermine their profitable arrangements with cable, satellite and phone companies.
The report of Sony’s deal with Viacom came amid an ongoing dispute between Time Warner Cable (NYSE:TWC) and CBS over transmission fees, which resulted in CBS and its affiliated channels to be blocked for the past two weeks for Time Warner Cable subscribers in New York City, Los Angeles and several other cities.
The blackout of CBS stations affecting more than three million households could last until the start of the National Football League season on Sept. 8, New York Times reported citing observers.
Three Time Warner Cable subscribers, on Thursday, filed a complaint in Southern California accusing Time Warner Cable of fraud and other illegal acts, since its continues to charge households for channels it has dropped, Los Angeles Times reported.
Internet-based pay television could come to the rescue of customers who are increasingly being affected by television channel blackouts as a result of disagreements between television content providers, and cable and satellite television operators who pay fees to transmit the content.
In July 2012, Viacom’s channels were unavailable for 10 days, after the company failed to strike an agreement with satellite operator DirecTV.