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Viacom chooses IBM for digital push

The media company plans to announce that IBM will help build the infrastructure needed to manage, store and keep content secure as Viacom makes its move into digital technology.

Media giant Viacom has hired IBM to help build the technology infrastructure for its future digital entertainment services, the companies plan to announce Monday.

Under the seven-year deal, New York-based IBM will provide technology and consulting services to Viacom's U.S. operations, which include entertainment properties MTV Networks, Showtime Networks, Paramount, CBS and Viacom corporate.

Financial terms of the deal were not disclosed.

The agreement highlights IBM's growing role in consulting and technical support of digital entertainment content, a market sought by the likes of Microsoft. IBM already has a multibillion-dollar deal with AOL Time Warner's CNN in combination with Sony to manage its multimedia assets.

"It's much more than a toehold in digital entertainment services; it's another important corner of a strategy," said Richard Doherty, director of research for The Envisioneering Group, a New York-based technology testing and market research firm.

He said IBM won the business partly because of its reputation for security, which surpasses rivals such as Microsoft. He added that Hewlett-Packard also might have been a contender for the business, but it has been wrapped up in a tumultuous merger with Compaq Computer.

"If you're looking for security, IBM has no peer. And if you're looking for storage, EMC doesn't have the end-to-end solution like IBM," he said.

For Viacom, the deal will help it manage entertainment programming and advertising distributed across its broadcast, cable TV, radio and Internet properties much easier. The company's programming, including shows on CBS and Paramount's "Star Trek," is increasingly becoming digital. To manage, store and keep that content secure, the company needed to find a technology partner to scale the business as it moves completely digital.

As part of the agreement, Viacom will use a team of business and IT consultants from IBM, who are experts in the media and entertainment industries, to develop new initiatives. Those include digital management of entertainment content, wireless content delivery and computer services delivered on demand.

"IBM is helping Viacom prepare for the digital entertainment future by enhancing our computing operations, creating cross-enterprise efficiencies and forming new technology initiatives," Russ Pillar, president of Viacom Digital Media Group, said in statement.

"In addition to significant cost savings, this relationship will bring us competitive advantages while allowing us to focus on the creation and distribution of world-class entertainment content."