Attention cable and satellite subscribers: A new option for your
TV service could be coming soon.
Sony has reportedly
struck a preliminary deal to carry Viacom (VIA) content on its upcoming pay-TV offering -- and the
twist is that the shows would air at the same time that traditional cable or
satellite customers can view them.
If the
tentative deal, reported by the Wall Street
Journal, goes
through, it would help Sony (SNE)stand out
from other companies that are trying to launch an Internet-based TV
subscription services, such as Intel (INTC, Fortune 500). Apple has also
been long rumored to be releasing its own "iTV" television, but its
negotiations with cable providers have reportedly stalled. Becoming a cable
competitor, as Sony appears to be doing, could be a path forward for Apple (AAPL, Fortune 500).
But a content
coup for Sony doesn't necessarily mean consumers will win out.
Unless Sony is
able to upend the cable industry completely (good luck with that), you
still won't be able to start picking and choosing channels a la carte rather than paying for a
raft of unwatched networks. Your cable bills won't go down.
Instead, Sony
and other Internet-based pay-TV services will probably look a lot like ...
regular pay-TV.
Sony whose
service would stream through its smart TVs and PlayStation gaming consoles,
would simply become another alternative to Comcast (CMCSA), Dish
Network(DISH, Fortune 500) and DirecTV (DTV, Fortune 500). That's because
the TV business is deeply entrenched. Networks and cable providers are
dependent on each other to survive, and they have no financial incentive to
stop making a ton of money.
While networks
like Viacom have proven willing to play ball with new entrants on the pay-TV
scene, they have no motivation to offer Sony anything other than what they give
regular cable providers.
Viacom offering
Sony or Intel an un-bundled set of channels, for example, would alienate their
bigger partners in the cable industry. Plus, it would be costly: a recent
report fromNeedham Insights showed switching to an a la carte model would cut cable and network
revenue in half, to about $70 billion.
And so Sony is
highly unlikely to cut special or cheap deals that will make a serious
difference for TV customers. While more choice is always a good thing for
consumers, it's likely this choice will look very similar to what's already out
there.
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