Magazine article Variety

Calling Sumner's Bluff: Is His Sony Deal Real?

Magazine article Variety

Calling Sumner's Bluff: Is His Sony Deal Real?

Article excerpt

The curious timing of Viacom's embrace of Internet TV reeks of hidden agendas

If the pay-TV universe can be thought of in terms of world wars, we may have just witnessed the assassination of Archduke Franz Ferdinand of Austria. The planet didn't know it at the time, but that 1914 shooting essentially precipitated World War I.

Standing in for the archduke almost a century later is a reported pact that will see Sony Corp. license the collective cable channels of Viacom for a new broadband-delivered TV service expected to launch by the end of the year. If this deal is real, the entrenched triumvirate of cable, satellite and telco distributors have essentially received a declaration of war from what may be just the first of a new breed of challengers that could include Intel, Google and Apple.

But it's a big "if." Not only are neither Sony nor Viacom officially acknowledging the pact, but Sony has yet to utter a word of confirmation that its virtual-MSO service even exists. Google and Apple's own TV plans are far from concrete; only Intel has been public about its intent, which hasn't scotched doubts that the chipmaker will actually make it to market.

However, the vaporousness of this long-anticipated challenge to pay-TV hegemony may mean there's ulterior motives behind why we are seeing the Sony-Viacom deal floated at this time.

Consider the common corporate parentage of Viacom and CBS Corp., which both count Sumner Redstone as the chairman of their respective boards. CBS is currently embroiled in a nasty multi-week standoff with Time Warner Cable over the terms of their affiliate deal.

What better way for Redstone to remind TW Cable that MSOs aren't the only game in town than for one of the biggest content companies to throw some weight behind a new market entrant. By giving just a whiff of substance to the possibility that Sony could get in the game, Redstone is warning TW Cable that it has the power to create a new competitor for them. …

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