Cable Companies Negotiating To Control What TV Shows You Can Watch Online

from the this-won't-end-well dept

Earlier this week when Hulu cut off Boxee, supposedly at the request of its content partners, there was some speculation that the real pressure may have come from the cable companies who are losing customers at a pretty rapid clip. And, while the content companies pretend to deny it, the fact that people can get so much content for free online is almost certainly contributing to that situation.

Now, in theory, this should be a good thing for the TV guys -- who you would think want as many people watching their shows/channels as possible. But, the problem is the business model. Doesn't it always seem to come down to the business model? The TV networks make so much money by selling the channels to the cable companies, that they're scared to death of losing that revenue. We saw a hint of this late last year when Viacom and Time Warner Cable played a big game of chicken over channels like Comedy Central and MTV.

However, now reports are coming out that the cable companies are negotiating with TV programmers to offer their TV content exclusively via their cable internet offerings. In other words, forget Hulu and routing around the cable company and the $80/month they're charging you. You'd have to keep your cable, even if you don't want it, just to get access to many TV shows over the internet (well, legally). Not surprisingly, both the cable companies and the TV programmers seem to like this sort of deal: the programmers continue to get their big fees from the cable companies, and the cable guys avoid losing many more subscribers. Comcast's CEO Brian Roberts is even saying "Online video is our friend, not our enemy."

And, to some extent he's right. If Comcast is going to survive it does need to look at online video as a friend, rather than an enemy -- but the problems may come about if they think that they can force customers to only get online TV if they keep their cable TV service at such a high price. Because, while these deals may make sense for the TV networks and the cable guys, they seem to be forgetting the customers -- many of whom have received a nice taste of TV online for free, and aren't going to be happy about having to pay up for it. The problem is that these cable guys aren't adding any new value. In actuality, it seems like they're looking to take away value from what's already out there -- and that never works. It will likely just lead to increased piracy, increased anger at the cable companies, and a continuing of the downward spiral. But, these days, watching old school companies accelerate their own downward spiral happens so often, you almost have to assume it's likely.
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Filed Under: cable companies, exclusivity, internet, networks, tv, video
Companies: comcast, hulu, nbc universal, time warner, viacom


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  1. identicon
    Matthe, 20 Feb 2009 @ 3:33pm

    I dumped pay TV

    I'm tired of paying for TV. So about a year ago, I dropped the cable. And with digital OTA, I've got a way better picture than the cable company ever gave me. So cable/satellite: It's really not that important.

    There are only about 3 or 4 (and 2 of them are on OTA networks) shows I watch religiously. For what I would have to pay for cable a month, I can buy the season of one of these shows on DVD. Sure, it's nice that I can see it on Hulu for free, and not have to wait till the end of the season to see the episodes for the cable only shows. But if Hulu (or whatever net broadcast system) drops the shows, well I drop Hulu.

    Either way the cable/satellite companies are not going to get another dime from me. It's never made sense to me that I have to pay for the service, and still sit through commercials. I always thought that commercials were supposed to pay for the broadcast. Oh well.

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