FEBRUARY 20, 2009 Cable Firms Look to Offer TV Programs Online
By SAM SCHECHNER and VISHESH KUMAR Wall Street Journal http://online.wsj.com/article/SB123509028580728229.html Top cable-television providers and TV networks are exploring a sweeping solution to the threat of online video: putting large numbers of cable shows online, but accessible only to cable subscribers. Comcast Corp. and Time Warner Cable Inc. are discussing with owners of major cable-TV networks ways to give cable subscribers online access to much of the networks' programming, according to people familiar with the situation. The discussions, according to these people, have been continuing in recent months and include network owners Viacom Inc., Time Warner Inc. and General Electric Co.'s NBC Universal, among others. These companies own such prominent networks as USA, TNT and MTV. The operators hope the new Web services, which could launch this year, will attract new subscribers -- even given the popularity of free-to-watch Web sites such as hulu.com -- by offering a wealth of previously unavailable video. Hulu.com is a joint venture of NBC Universal and News Corp., which also owns Dow Jones & Co., publisher of the Wall Street Journal. Offering access to unique Web video would give cable operators an advantage over satellite and phone rivals, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. "This allows cable operators to kill two birds with one stone," Mr. Moffett said. Cable networks and operators have a big stake in preserving the cable-TV business model: U.S. cable, satellite and telecom operators paid cable-network owners about $22.5 billion in subscription fees in 2008, according to research firm SNL Kagan. Citing those fees, cable operators have placed limits on how much free content some networks can put online. The programming available on the proposed Web services would likely be in a streaming format with ads, accessible in and out of the home, and without any additional charge to cable-TV subscribers, the people familiar with the situation said. Under the arrangements being discussed, existing cable subscribers could access content online that goes well beyond what is currently available free to consumers, Brian Roberts, the chief executive of Comcast, said in an interview. "Online video is our friend, not our enemy." NBC Universal said it is "intrigued" by the idea and participating in a test, while Viacom's MTV Networks called the concept "a great testing ground for us." A spokeswoman for Time Warner's Turner Broadcasting confirmed it met with operators. Major cable operators -- Time Warner Cable in particular -- have said that the proliferation of free video content online threatens to undermine the subscription business model for the cable-TV business. "If all of the programming goes to the Internet, and it's free, then there is a whole source of revenue that the entertainment business is not going to have anymore," Glenn Britt, CEO of Time Warner Cable, said in an interview last year. Beside the technical hurdles, some critics say it might be too late to put the online-video genie back in the subscription bottle. A growing number of people are growing accustomed to watching TV shows online, without any charge. About 136 million people watched online video content in January, up 16% from the same period in 2008, according to Nielsen Online. "These plans are about keeping you from leaving your cable system because you want online access to that content," says Jason Hirschhorn, former president of the entertainment group at EchoStar Corp.'s Sling Media, which serves online video. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
