Sony picks up CBS for streaming cable service

Sony's plans for an Internet-delivered version of cable TV have gained another big supporter: CBS.

The country's most popular broadcaster said Wednesday that it had reached a carriage deal with Sony. The announcement came two months after a similar deal between Sony and Viacom. Both CBS and Viacom are controlled by Sumner Redstone.

The deals will allow Sony to carry the CBS broadcast network and Viacom channels like MTV in a bundle of channels that are piped to subscribers' screens and PlayStation consoles via the Internet.

Sony needs these carriage deals for a product that has been in the works for well over a year. The company hasn't said much about it, other than to call it a "cloud-based TV service."

Imagine it being a kind of "virtual cable" -- a version of the traditional cable bundle, with live channels and on-demand TV shows, that's convenient to access on a wide variety of devices. It's one vision for the future of television.

Related: would you sign up for "virtual cable?"

It is unclear when Sony is seeking to launch the "cloud-based" service.

For CBS, Sony is another distributor, akin to Comcast or DirecTV. A CBS spokesman declined to say whether CBS-owned channels like Showtime would also be included in the Sony package of channels.

CBS Corporation CEO Les Moonves announced the Sony deal during a third-quarter earnings conference call.

He called it a "historic agreement" and said that Sony would pay the "highest rates ever" to carry CBS -- i.e., rates higher than Comcast or DirecTV.

Overall, CBS's third-quarter earnings beat Wall Street expectations thanks to the power of its broadcast network. Revenues were up 2% to $3.32 billion.

"I am particularly pleased with the CBS Television Network's encouraging start to the fall season, which has reloaded our owned content pipeline in a big way," Moonves said in a letter to investors.

The company noted that "Thursday Night Football" helped drive ad sales, which grew 2% in the quarter.

However, the investment in the highly rated sports broadcast brought down operating income 2% to $814 million.

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