TV network giant,
) recently entered into a new content sharing agreement with
). Per the deal, Viacom will give access to Sony to stream its
live shows on Internet through its TVs, game consoles and Blu-ray
Increased deployment of 4GLTE services coupled with higher usage
of smartphones and tablets have forced most channel broadcasters
to view shows on Iinternet as it offers more flexibility to its
viewers. Moreover, low-cost Internet video streaming companies
), Hulu and YouTube have become major threats to the overall
pay-TV industry. In order to counter such threats, Sony has
signed this deal. Sony is also planning to strike similar deals
with other channel majors like
Time Warner Inc.
), Disney and CBS.
On the other hand, increasing online video streaming services
will hugely benefit Viacom in terms of higher affiliated fee
revenues as the company has a huge collection of movies from
Paramount and runs popular networks like MTV, VH1, Comedy Central
In the recently concluded third quarter of 2013, Viacom reported
strong financial results despite missing the Zacks Consensus
Estimate. Both domestic and worldwide affiliate revenues rose 28%
and 26%, respectively, as compared with the prior-year quarter.
Viacom is planning to renew its agreement with NFLX at a higher
rate, which will drive the domestic affiliate revenues further.
Moreover, Viacom's top line will likely witness a huge
improvement as more satellite and cable TV service providers
continue to increase their VOD movie services.
Currently, Viacom has a Zacks Rank #3 (Hold).
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