By Michael Cohn

Sony is bringing the Internet and television closer together, adding an optional Internet module for its Bravia line of flat-screen TVs on Monday that will be able to pull in content from Internet services like AOL Video.

AOL and Sony announced the deal at the International Consumer Electronics Show in Las Vegas. Other video providers will include Yahoo, Sony Pictures Entertainment, and the Grouper service that Sony acquired last year (see Sony Acquires Grouper for $65M).

The TV and the Internet have been coming together, with companies like Sony leading the charge to make devices like the PlayStation 3 act like a kind of central hub for video games, high-definition DVDs, and Internet access.

The Bravia line has been Sony’s biggest bet in the growing flat-screen TV market, as the company has phased out its other lines of TV sets. Teaming up with AOL, Yahoo, and its own content divisions will help the Tokyo-based electronics and media giant sell more TVs and build on its other products.

Sony will sell the Internet Video Link module as an optional add-on for its TV sets. The company has designed the module to hook into the back of the TV set. It can accept an Ethernet cable or a wireless connection through a universal serial bus port.

The deal will also help AOL with its effort to expand the reach of its own video efforts.

The Dulles, Virginia-based company revamped its video site last year to capitalize on the demand for video over the Internet and has offered a selection of old TV shows, user-generated content, and channels from MTV, Comedy Central, Nickelodeon, the History Channel, and other sources (see AOL Recasts Online Video).

At CES last year, AOL teamed up with Intel when the chip maker first introduced its Viiv PCs (see Intel: Chip Maker to Video Firm). The companies formally launched a Viiv device that could run the AOL Video service last September (see AOL, Intel Team on Viiv).

Mimicking the PSP Menu

The Sony deal is the second hardware deal for AOL on its video service. “This is part of our strategy to make AOL Video available across multiple devices,” said Josh Freeman, senior vice president of AOL Video.

He said the content will all be free, although AOL Video does sell movie downloads through the Net as well (see AOL Offers Movie Downloads). But users won’t be able to download the content to the Bravia, just stream it.

For right now, AOL isn’t offering any specialized content for the Sony Bravia, and it does not yet offer any high-definition TV programming, according to Mr. Freeman.

AOL Video will be one of the selections on the menu for the Bravia module. The menu will offer the same look and feel as the interface on the Sony PSP (PlayStation Portable) and PlayStation 3.

“It will be using the cross media bar that Sony first introduced with the PSP and is now making standard across their video devices,” said Mr. Freeman. “It will just be a navigational element for someone who has used the PSP in the past.”

He would not confirm whether AOL is planning deals with any other TV makers, but said the company is having discussions with “a wide variety of potential distribution partners for AOL Video.”

Shares of Sony fell $0.04 to $44.76 in recent trading, while shares of AOL’s parent company, Time Warner, dropped $0.06 to $22.17.

In a separate but related announcement Monday, Sony also said it would offer AOL Video, in both free streaming and pay-to-download forms, through a Sony-branded AOL portal on the desktop of its Vaio line of computers. Users also get access to photo sharing and storage via AOL Pictures.