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Viacom to let Sony stream its programs

Bloomberg

Sony Corp. has reached a preliminary accord to stream cable television programming from Viacom Inc. over the Internet to TVs, game consoles and Blu-ray players, a source said.

Under the deal, Sony would use the Web to deliver shows such as “SpongeBob SquarePants” and “Teen Wolf” to homes with those products, bypassing traditional pay TV providers, said the source. The service also would sell Viacom shows and movies on demand.

Sony has been seeking such agreements to supplement the films and television shows from its own studio and TV business, which it plans to offer consumers who buy the company’s electronics.

Adding live feeds from other studios to Sony’s own content may help drive demand for the company’s consumer electronics by creating online services to compete with providers including Netflix Inc.

Chief Executive Officer Kazuo Hirai, in the post for 16 months, is pushing his “One Sony” vision to unite the company’s consumer electronics products, including mobile devices and TVs, with games, music and film content.

“Sony wants to enable its hardware to access content, but they also want to keep the platform open to others in order to gather more users,” said Koki Shiraishi, an analyst at SMBC Nikko Securities Inc. “The only thing that matters for the content holder is if they can monetize their shows.”

Mark Jafar, a spokesman for New York-based Viacom, the owner of networks including Nickelodeon and Comedy Central, declined comment, as did Dan Race, a spokesman for Sony.

The parties must still execute a definitive agreement, but the terms will probably mirror those that Viacom has signed with traditional pay-TV providers, according to the source.

After posting a profit in smartphones and television sets, Hirai has committed to rejuvenating a film unit that slumped to No. 6 at the U.S. box office this year after being in the top spot last year.

This year, Sony moved its PlayStation and network entertainment businesses into the same building in San Mateo, California, to collaborate on offerings that could include a monthly subscription-based entertainment service, according to sources.

Sony bought a 32 percent stake in Multi Screen Media in India for $271 million in March, boosting its stake in the television network venture to 94 percent, according to data compiled by Bloomberg. The transaction was part of Sony’s efforts to boost its entertainment operation, Chief Financial Officer Masaru Kato said Aug. 1.

The company expects cooperation between its entertainment and consumer-electronics businesses to increase and help drive growth in the units that makes smartphones, TVs and other devices, Hirai said in a letter to Sony shareholder Third Point LLC on Aug. 6.

Like Intel Corp., Microsoft Corp., Google Inc. and other technology companies, the maker of Bravia TVs and Xperia phones has struggled to obtain movies and shows for an Internet-based entertainment service. Major film and television producers fear such services will jeopardize the $100 billion a year in fees they share with cable, phone and satellite TV providers. The TV industry also collects $59 billion a year in ad sales.

Intel, based in Santa Clara, California, is developing a set-top box for sale in stores this year, Eric Free, a vice president and general manager, said in June. The product will be sold with a monthly subscription providing live and on-demand entertainment.