Peter Kafka

Recent Posts by Peter Kafka

Viacom-Sony TV Is a Big Deal. It’s Also the Same Deal We Already Have.

poltergeistViacom’s deal to deliver its cable TV shows to a new Web video service from Sony isn’t final.

But it is a big deal: As the Wall Street Journal first reported today, this is the first time a major programmer has agreed, in principle, to sell a “linear” feed of its shows to the Web.

That is, subscribers for a yet-to-launch Sony TV service would get Viacom’s shows at the same time they get delivered to Comcast, or DirecTV, or Verizon Fios subscribers.

Viacom’s agreement — or potential agreement — will make it easier for other programmers to step out and make their own agreements. That’s also big.

So for argument’s sake, let’s say Viacom and several other big programmers sign on, for real, and Sony launches sooner than later.

Here’s the key question: Are those guys going to sell their stuff to Sony in a way that differs materially from the way they’re selling their stuff to traditional pay TV operators?

I haven’t been able to get confirmation on this. But I do have an educated guess: No.

Which means that if Sony (or any other “over the top” Web service, like Intel) launches, it’s going to sell TV the way you buy TV right now — a bundle of channels, at one price, which will be very close to the price those bundles cost everywhere else. [UPDATE: The proposed deal is for the full bundle of Viacom channels, according to a person familiar with the negotiations.]

Which is exactly what programmers have been saying for quite some time, both publicly and privately, that they’ve been willing to do. This despite some misplaced fears that traditional cable TV operators like Time Warner Cable would be able to quash a rival pay TV service.

Again, recall that the cable TV guys weren’t happy when Dish and DirecTV showed up and started competing with them 20 years ago. But the programmers were happy to sell the satellite guys their stuff, because they like having more customers. Same thing 10 years ago, when Verizon and AT&T showed up to add even more competition.

The curveball would be if the programmers were willing to give Sony, or Intel, or Apple, or any new Web entrant, the ability to do something radically different with their shows — like only offering a sliver of channels, instead of a big bundle. Or to enable ad-skipping, like Apple proposed this summer. But so far there’s no sign of that.

Meanwhile, if you’re one of those people who takes delight in the notion of the Web “killing” cable, remember that a Web TV service still needs to be delivered over the Web, which means anyone who uses it isn’t cutting the cord at all: They’re just paying a different programmer but using the same pipe.

That is: If you’re getting TV and broadband from Comcast, and start getting TV from Sony instead, you’re still going to pay Comcast* for broadband.

And that could theoretically be a good thing for the broadband guys, as long as they’re able to increase their prices as usage goes up.

But no need to get ahead of things. Let’s see who else Sony (or Intel, or Apple, or anyone else) signs up, and what they get when they do. Just because it’s not earth-shaking doesn’t mean it’s not going to be fun to watch.

* Or, possibly, AT&T and Verizon, which turn Comcast’s broadband monopoly into a duopoly in some markets.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work