The cable box edges closer to its end

A new streaming deal between Sony and Viacom intensifies the upheaval in the pay-TV world.

By Jonathan Berr Aug 16, 2013 3:39PM
Watching television (© image100/Corbis)Will the cable set-top box go the way of the horse and buggy? Perhaps one day.

The alliance between Sony (SNE) and Viacom (VIA) that has been reported by The New York Times and others shows that day may be coming sooner than many expect. Viacom has "tentatively agreed" to allow its cable channels such as Nickelodeon and Comedy Central to be part of an Internet-based TV service that Sony is developing. This is big news for several reasons.

First, any deal between Sony and Viacom could lay the groundwork for similar pacts with other content creators such as Time Warner (TWX) and 21st Century Fox (FOXA). Moreover, it may lead producers to sign deals with Google (GOOG) and Intel (INTC), which are developing offerings similar to Sony's.

"Analysts say cable delivered through the Internet could give households many more choices -- if the new services give customers more for their money and if cable incumbents don't smother the services," according to The Times.

The bad side to these types of arrangements is that they'll make it harder for consumers to avoid "the bundle." If these nascent services want access to popular channels, they're going to have to take less popular ones as well. Cable and satellite providers have done this for years, which forces consumers to shell out big bucks for shows they never watch.

Cablevision (CVC) filed suit against Viacom over its channel-bundling practices earlier this year calling them "anti-consumer and wrong." New York-based Viacom, not surprisingly, rejects those arguments.

Here's one of the few issues where content creators and the pay-TV industry agree: If consumers are allowed to buy only the channels they actually watch, it would create a fiscal Armageddon for both of their industries. But as the number of cord-cutters rise, they may be forced to change their tune regarding what's known as a-la-carte pricing.
 
Consumers have to wonder how much choice they will have from services such as Sony's, which will be similar to the cable and satellite services they already use. And for people who think that quitting cable TV will deal a mortal blow to companies such as Comcast (CMCSA),  remember: You'll have to stream your videos over something. More likely than not, it will be an Internet connection from Comcast or one of its rivals.

Jonathan Berr does not own the listed stocks. Follow him on Twitter @jdberr.

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121Comments
Aug 16, 2013 4:00PM
Aug 16, 2013 4:24PM
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I cut the cord 3 years ago... went straight internet only...  hooked up a magic jack for a house phone and didn't look back... i got off the $200 per month deal..  paid for a new deck out back in cash last year. I guess I did have "extra" money after all..  Its' amazing what you can do with an extra $2400 a year in your pocket... when I want to watch something I just pay for what I want to watch on amazon prime or netflix.. heck those were only $70 and $89 a piece for the year..and You get High Def over the air... so Im not missing anything Fox, ABC, NBC has .. some of you will say what about ESPN?... I say Xbox 360 or Playstation 3 of which we have both.. and you can dial those channels in when you need them... sorry but it's just not worth it any more..
Aug 16, 2013 4:23PM
Aug 16, 2013 6:19PM
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When that happens get ready for internet to sky rocket . These companies will have to make up the loss somewhere rather than lowering the prices of TV they keep jacking it up .. 
Aug 16, 2013 7:30PM
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I cut from Dish Network over a year ago.  Every program I was recording came from the major networks.  So an antenna is now installed in the attic and receives around 29 FREE HD digital channels over the air.  I use a TIVO box to manage & record programs from Netflix, Amazon Prime & my antenna and always have too many recorded programs to watch.  Next project is to install a rotor on my antenna in the attic which will bring in several more FREE channels.  My computer's Windows Media Player works as well as the TIVO but do not want to over tax my computer.  Do it:  cut the cord.
Aug 19, 2013 7:40AM
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If everyone and I mean everyone disconnected from cable and satellite how long do you think it would take to get a new low cost setup for your home ? My guess is not very long ! They all deserve to have it come crashing down in their laps !

Aug 17, 2013 1:48AM
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RECENTLY WENT TO COSTCO & BOUGHT A NEW 47" SMART TV FOR $589.  WENT TO

WALMART & BOUGHT RABBIT EARS ANTENNA FOR $10.  HOOKED IT TO TV & GET 40

DIGITAL CHANNELS FOR FREE.  ALSO CAN CUT OUT ANY CHANNEL I DONT LIKE.

SAVE $50. A MONTH IN CABLE FEES.  12X50 IS $600. SAVED IN ONE YEAR.  PAYS

FOR NEW 47" FLATSCREEN SMART TV IN ONE YEAR.    AGED SENIOR

Aug 16, 2013 9:02PM
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Our cable/phone/computer costs over $225/month.  I feel all of this is getting out of control.  What about people who are retired - they are on a fixed income - no raises, no extras.  It seems odd to save anything you have to have all three.  And, what do we save?  Cable companies offer specials to new customers for a year and then the same over pricing begins.  To have a dish means we would have to  have a carrier for our home phone and computer hookup, so where would the savings be?  We would end up paying $50 a month for our house phone (or more), who knows what computer hookup would be and then we would still be paying out for dish TV.
Aug 16, 2013 10:06PM
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Do not let them bundle you!!!  LOL!!!
Aug 17, 2013 2:05AM
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Of course the reporter has conveniently overlooked the fact that ISP's already penalise customers for using too much bandwidth!  So if this is to become a viable proposition will these same greedy criminal leeches consider allowing thier users to take 50 gig or more a week for no extra cost, I doubt it very much as that would need them to invest in infrastructure instead of price gouging their customers!

We already pay almost twice as much monthly for half the service offered in Europe and I don't see that changing until ISP's are forced out of their monopoly areas.  They continually say they compete but for most of the USA if you have even two different providers you are lucky.

Aug 18, 2013 12:55AM
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I remember reading a story about a man who appeared to be able to accomplish an amazing amount of work through out his day. When asked about this, his comment was: "I don't watch TV". This could be the last straw.
Aug 16, 2013 11:15PM
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Cut the cord a year ago,now use ROKU and have not looked back. Was tired of paying 120.00 a month those people need to go suck off!!!!!!!!!!!!!!!!!!!!!!!!!!!and burn to the ground
Aug 16, 2013 8:31PM
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I do not watch television.... if I want to watch something I put on a dvd of which I have collected over the years but stopped purchasing about four years ago.  There is nothing of interest to me going on right now.  As for news - I read the newspaper and listen to radio which is free.
Aug 16, 2013 8:38PM
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I cut cable out two years ago and its been great. Everything I want is online, in HD and commercial free. Had a problem with going over Cox's annoying monthly cap but I solved that too. Switched to home business internet, more speed and no caps for 10 bucks more than what I was paying. It's the best I can do until the day Google hears my pleas and brings Google Fiber to my area. 
Aug 16, 2013 5:26PM
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All they will do is increase the cost of internet.  The cables companies are the only way to get internet.  Plus there is already a 250 gig cap on most internet.  If all your tv is coming from it you will run out quickly.  That will lead to high fees.

You can't win stop trying.
Aug 17, 2013 1:00AM
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 ATT and Verizon already offer IPTV, the only issue is that they are just like cable when it comes to price. So this Sony and Viacom deal will not be any different for the consumer. 
Aug 16, 2013 7:59PM
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If you feel "ask your doctor" ads and medicare supplement ads are destroying our country by extoriting money from the citizens, please give me a thumbs up.  If you love your pills and look forward to the next "ask your doctor" ad coming your way right after the next medicare supplement ad, please give me a thumbs down.  If you think the Taliban is in control and supportive of the "ask your doctor" and medicare supplement ads, give me a thumbs up, please.  If you think the Taliban is here to make your healthcare "affordable," please give me a thumbs down!!!
Aug 17, 2013 2:16AM
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Find some old rabbit ears and hook them to the tuner input to your digital ready TV.  Go to set up and find the available channels.  In my area I have 50 channels, major news, football, baseball, retro TV.

Buy an unlocked Iphone 5 from Walmart for $650 and unlimited everything is $45 plus taxes per month

Get Netflix for $8 or $16 per month and Amazon for $80 a year, get a ROKU add Pandora and you are free.  You will need internet access and that is the problem.  It varies by area. I'm surprised the Billionaire do-gooders haven't found a way to supply Americans with cheep internet service.  After all we are supplying people who can barely afford a 3 cent candle with Electric Power.

Aug 17, 2013 1:54AM
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I would gladly ditch the cable but ever since they went to that (*!&^*@# digital television I can only get two UHF channels on my antenna.
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