Sony Corp. revealed that it reached an agreement with Viacom Inc. to include more than 20 of its networks, such as MTV and Nickelodeon, in the Internet-based TV service it has been planning. A preliminary agreement between the two companies was reported by the Wall Street Journal a year ago.
The programming agreement was the first announced by Sony, which is currently negotiating with a few other companies. The Japanese entertainment group hopes to reach other such agreements before the Internet-based TV service trials start by the end of 2014.
The deal is also the first time when Viacom has made its programs available for such a service. According to the companies statement, it covers both live and on-demand programming.
“We’re excited to be among the many programmers that will help power Sony’s new service and advance a new era for television,” Viacom Chief Executive Officer Philippe Dauman said in the statement, which was cited by Bloomberg.
The deal is considered a crucial part of Chief Executive Officer Kazuo Hirais turnaround strategy for Sony, which managed to return to profit in July this year and by this broke a series of profit warnings.
According to people familiar with the process, the Japanese company is currently negotiating with several other companies, including Walt Disney Co. and 21st Century Fox Inc., to join Viacom in providing shows available for Sonys Web-based service.
“Sony is clearly beefing up content offerings for its growth plans for its Entertainment Network division, recently merged with its gaming unit,” Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore, said cited by Bloomberg.
Sony Corp. rose by 2.73% on Thursday in Tokyo to close at ¥2 104.5 per share, marking a one-year change of -1.15%. The company is valued at ¥2.15 trillion. According to the Financial Times, the 18 analysts offering 12-month price targets for Sony Corp. have a median target of ¥2 050, with a high estimate of ¥3 000 and a low estimate of ¥1 400. The median estimate represents a 0.07% increase from the previous close of ¥2 048.5.
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