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  (Source: sonynsx46gt1.com)
Sony has already approached NBCUniversal, News Corp. and Discovery Communications Inc. to discuss the rights to offer their TV channels over the Internet

Sony is looking to challenge cable TV operators with an Internet-based rival of its own, which would offer traditional TV channels as well as Internet content.

According to anonymous sources close to the talks, Sony is looking to launch its Internet-based TV package to those with Sony devices such as TVs, Blu-ray players and the PlayStation 3.

Sony has already approached NBCUniversal, News Corp. and Discovery Communications Inc. to discuss the rights to offer their TV channels over the Internet. It's unclear if Sony has made any headway regarding these negotiations.

"As such with these kinds of speculations, we won't be commenting on rumors," said a Sony Network Entertainment spokesman.

This venture could prove to be beneficial for Sony if it pulls through. For one, Sony owns a TV and movie studio, but not a major U.S. channel, so it has nothing to lose if customers left traditional TV cable for its Internet service. Also, since Sony's Internet package would only be available to those with Sony products, it could boost hardware sales.

Sony's move into this business also comes at a good time, since viewers are watching more videos online these days. Also, the number of households willing to pay large monthly TV cable fees is dwindling.

But the path to success won't be entirely smooth for Sony. One issue could be Sony's intent to license a smaller package of channels than traditional cable TV operators in an effort to offer its services at a lower price than the incumbents. However, media companies tend to stray away from undercutting their largest customers. In addition, TV channel owners make it very costly for distributors to sell their channels in smaller packages or individually. TV channel owners prefer to keep a set pricing structure when licensing content to Web distributors.

But Sony plans to start with "smaller niche channels" who have had problems receiving fees from cable companies.

Traditional cable TV operators could face some serious competition if Sony's Internet venture takes off, and Sony certainly isn't alone. Dish Network Corp. is another company looking to dip into the Web-based TV industry, and even met with media executives recently.

Source: The Wall Street Journal





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