In September, Sony Corp. (SNE) and Viacom Inc. (VIA) formally announced a long-expected programming agreement to carry live and on-demand programming for at least 22 cable networks, including Nickelodeon, MTV and Comedy Central, on Sony's over-the-top TV service in the U.S. The deal puts some meat on Viacom's purported plan to begin testing a pay-television service delivered via PlayStation consoles, Bravia smart TVs and other Sony devices by the end of the year.
Viacom's plans would be a dramatic expansion of so-called over-the-top television, the new pay-TV services that are threatening the business model of the dominant incumbent cable operators like Comcast Corp. (CMCSA) , which deliver television programming and Internet services over their broadband fiber network, and of the satellite TV providers Dish Network Corp. (DISH) and DirecTV Group Inc. (DTV) . Unlike the traditional TV services and video services offered by major telephone companies, Verizon Communications Inc. (VZ) and AT&T Inc. (T) , the OTT providers would not own their own telecom networks but would deliver programming over the very Internet lines controlled by Comcast and the other incumbent providers. The most popular OTT at the moment, is, of course, Netflix Inc. (NFLX) , which TV viewers subscribe to as either an add-on to their traditional pay-TV service or as a stripped-down programming service delivering video-on-demand and original programming to the budget-minded.