As it stands today, there are quite a few television shows available online for free via Hulu and broadcast websites, provided you’re willing to sit through a few ads. The cable companies are losing out on customers because of this content, so now they’re looking for a way to strong-arm customers into paying for cable. Their solution? To offer large numbers of cable shows online, but make that content only accessible to cable subscribers.
The Wall Street Journal reports that Comcast and Time Warner Cable are looking into ways to give cable subscribers online access to many major cable-TV networks’ programming. The discussions with major cable-TV networks include network owners Viacom, Time Warner, and General Electric's NBC Universal, as well as others. The operators are obviously hoping the Web services will attract new subscribers by offering previously unavailable video. In addition to attracting new subscribers, the operators also stand to gain an advantage over satellite and phone rivals with this Web content.
Given that U.S. cable, satellite, and telecom operators paid cable-network owners about $22.5 billion in subscription fees in 2008, there’s definite incentive for cable networks and operators to preserve the cable-TV business model as we know it today. Those fees are also the reason cable operators have placed limits on the amount of free content networks can put online.
People familiar with the situation said the proposed Web services would likely be in a streaming format with ads. The content would be accessible at home and away without any additional charges to cable TV subscribers.
There’s a good amount of support from the big guys on this: Brian Roberts, chief executive of Comcast, said, "Online video is our friend, not our enemy;" NBC Universal is "intrigued" by the idea and participating in a test; and Viacom's MTV Networks is calling the concept "a great testing ground.”
There’s no doubt this move is an attempt to keep money in the operator’s pockets. Let’s hope consumers don’t get the short end of the deal on this one.
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