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Viacom and Netflix: Friends or Enemies?

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Viacom chooses to cooperate with industry disruptors

Viacom (VIA) (VIAB) has emerged as a special case in the US media industry’s reaction to cord-cutting. Instead of launching an online video service to compete with Netflix (NFLX) like AT&T (T), Dish Network (DISH), and others have done, Viacom has mainly chosen to cooperate with the industry disruptors. Viacom has contracts to produce shows for Netflix, Amazon (AMZN), Snapchat (SNAP), and other video streaming services.

Last month, Viacom’s CEO, Bob Bakish, indicated that the company would continue to cooperate with video streaming providers like Netflix because the strategy has been successful.

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Talent poaching

There has been an issue between Viacom and Netflix. In October, Netflix hired a senior production executive from Viacom, according to a report from Variety. Viacom sued Netflix for illegally poaching one of its employees.

In a sign that Viacom and Netflix aren’t working out an amicable resolution to the dispute, Netflix fired back at Viacom. Netflix accused Viacom of trying to tie down employees with unlawful contracts, according to Hollywood Reporter.

The dispute might impact the relationship between Viacom and Netflix. For Viacom, losing key production executives could dent its competitive advantages as it works to position itself as the shop for digital videos.

Viacom’s profit

Viacom’s revenues rose 5.0% year-over-year to $3.5 billion in the fourth quarter ending in September. The company turned a profit of $394 million in the fourth quarter.

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