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Could Sony-Viacom Deal Be Beginning of End of Pay TV?
Could Sony-Viacom Deal Be Beginning of End of Pay TV?

By Jennifer LeClaire
August 16, 2013 2:28PM

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The Sony-Viacom deal, in part, could have a profound impact on cable TV providers. About 7 percent of pay TV subscribers are likely to cancel their subscription services in the next six months. Of those who had connected their TVs to the Internet, nearly 9 percent said they were highly likely to cut the cord.
 



Sony could soon boast a major advantage in the emerging Internet TV market. That's because the entertainment giant has a tentative deal with Viacom. So says a report in the New York Times.

Viacom is behind many popular cable channels, from MTV and Nickelodeon to Comedy Central, BET and beyond. These and other channels would appear on an Internet TV service Sony is reportedly developing.

The Times is positioning the deal as the "first of its kind between a major programmer and any of the technology giants that are trying to disrupt traditional modes of TV delivery." Yet, little is known about Sony's plans for Internet TV, including what it may be called or how it will be delivered.

Google and Apple Competing

The Sony news comes less than a month after Google rolled out its Chromecast solution for $35. The industry buzzed about the dongle that's trying to take on Apple TV and others for more than a week.

Google's dongle plugs into a TV's HDMI port to let users stream media from computers, tablets and smartphones. The dongle is available now for $35 in the U.S. Chromecast works with Netflix, YouTube, Google Play Movies & TV, and Google Play Music, and Google promised more apps like Pandora are coming soon.

Unlike other streaming solutions, Chromecast lets you multitask. In other words, you can still send emails or surf the web while you watch the content streaming to your TV. Chromecast works with Android and iOS tablets and smartphones, as well as Mac and Windows.

The tech world is also waiting and watching to see if Apple will offer a new version of its Internet TV service at its Sept. 10 event. An iPhone 5S is certain, as well as new Macs, but a new and improved Apple TV is questionable.

Pulling the Plug

All of this could have a profound impact on cable TV providers. According to research from The Diffusion Group, about 7 percent of pay TV subscribers are likely to cancel their subscription services in the next six months. Of those who had connected their TVs to the Internet, nearly 9 percent said they were highly likely to cut the cord. That compares with 3.5 percent of those who hadn't connected their televisions to the Internet.

"For years, the casual relationship between the two behaviors has been questioned, and rightly so. Yet TDG has argued for several years that this relationship would develop over time and hit an important landmark moment of sorts in 2013," said Michael Greeson, co-founder and president of TDG.

"That is indeed what has transpired, and now the pay TV industry and prominent analysts are coming to terms with the fact those with access to online video sources on their TV are more likely than their counterparts to be reconsidering the value proposition of incumbent pay TV services," he said.
 

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