Are Cable Companies Looking To 'Emulate' Web Video Sites, Or Destroy Them?

from the face-value? dept

A piece in BusinessWeek says that cable TV companies are "pushing to become more Web-like" by expanding their online video offerings and making their core TV product work more like the web than the traditional channel-delineated system. On the face of it, this is a good thing, since we've long argued that the TV channel is an outdated concept, and should be seen as being like a web bookmark more than anything. But the article largely glosses over one key point in the cable companies' push to grow their online video efforts: they want exclusivity. So instead of throwing things open and using an ad-supported model, like Hulu, they want to take TV shows and video content, and lock it up inside a walled garden for paying customers. That's not "web-like", it's exactly the same as their current business model. Of course, even if these plans don't work out, they've got another way to try and profit from online video: by introducing capped broadband plans that will charge customers based on how much traffic they use. Time Warner's CEO is quoted in BW as saying "we really need to look at what consumers want." It's hard to imagine they want capped broadband, and they want video locked up behind paywalls. The popularity of the likes of YouTube and Hulu indicate they want something very different from what the cable operators have in mind.

Filed Under: cable companies, exclusivity, web video
Companies: comcast, cox, time warner cable

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  1. identicon
    Weird Harold, 3 Apr 2009 @ 8:22pm

    In the long run, this is an issue that is likely to end up in court, but not exactly for the reasons you would suspect.

    Free TV over the internet (especially at the point where the picture quality is comparable to the quality of cable, say 8Mbps or so) will raise issues of rights, fees, and payouts. Example, if a cable company does not carry channel A, but one of their subscribers views it via download, would the cable company be liable to pay fees?

    Conversely, if the cable company is paying a fee, but the internet user can watch the channel online without subscribing to the channel, is the cable company paying for nothing? Should the fees paid by the cable distributor for carriage by rescinded?

    Is the TV channel that streams or distributes content violating their agreement with the cable companies semi-exclusive distribution deals?

    Where does net neutrality come into all this? Are the cable companies obliged to offer no cost (to the channels) distribution on their networks, considering that it is direct competition for their cable dollars?

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