Comcast And Time Warner Team Up To Control What TV You Watch Online

from the consumers-anyone? dept

There's certainly been plenty of talk lately about how efforts like Hulu to move television shows online could undermine the television industry as people start to realize that they don't need to pay gobs of money to a monopoly cable provider (other than maybe for broadband). The TV content folks believe this is a problem as well, because the cable companies currently pay them corporate-sized gobs of money for the rights to offer their channels to end customers. This leads to regular fights between cable companies and content providers -- but neither really want to see that old system go away. The cable companies want end users to keep paying monopoly-inflated gobs of money, and the content creators want that hefty check from the cable companies.

So, it was no surprise back in February to hear of plans to make agreements between cable companies and content providers that would limit what kind of video you could watch online, requiring you to be a cable company subscriber and "authenticating" what you could watch. Thus, it should be no surprise that Comcast and Time Warner are now announcing exactly that.

This should raise all sorts of antitrust concerns. First, you've got industry execs working together to limit consumer choice, and these industry execs already have quasi-monopolies in certain regions. And they're doing this to keep prices high against competition from the internet. Doesn't that seem like a problem?

The real issue, of course, is that the equation is (as it so often is with such companies) backwards. Rather than embracing what the internet allows these companies to do, they're trying to remove that ability, and make it act like good old television, with those good old revenue streams -- and, amusingly, claim it's "the future of television." Not even close. It's television's past, with an attempt to move it to the internet without any real advantages. As Om Malik points out in the link above: "The deal makes it painfully obvious that everything cable companies do... is done to save their video franchises." It's not about looking forward. It's about preserving the past.

Filed Under: cable companies, online video
Companies: comcast, time warner cable

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  1. identicon
    Don't work for a cable company, 24 Jun 2009 @ 6:47am

    Re @ *yawn*

    So, I had my own thoughts to post here, then I saw *yawn*'s post and so many responses, and decided to get in on the action.

    I actually agree with *yawn*

    Originally, networks made and owned all the content.
    Now the content creators and the content providers are (for the most part) separate.

    Comedy Central (for example) wants their content seen by as many people as possible, even those without cable, so they make that content freely and easily accessible online.

    Other content creators don't do that for reasons we cannot begin to speculate about.

    What it comes down to, however, is that to be successful in business you need to focus on what you're good at. If you're a great content creation company you should not be diverting your resources to providing that content to the world because you'll no longer have the resources to continue creating great content.

    Sure, an independent film-maker can post their film online. But if they want it to be seen by the widest possible audience with the best experience, they'll want audiences to at least have an opportunity to watch on a big screen in a dark crowded theater. Not on a laptop, not on a tv, and definitely not on an ipod. Yes, they're happy that people are seeing their art, but if they want to make a living they need to continue making art, not focusing on getting their art out there.

    That's why there are publicists and distributors.

    This is a simple contracts issue. If you make something you have a right to decide how it will be put out there for people to find and see/hear.

    Let's say you're a tv production company and you produce the show "I have too many kids: Please, sponsors, help me pay my bills!" You sign a contract with TLC to broadcast your show. You really wanted the show out there so you signed the contract even though it gave TLC all the worldwide distribution rights for 5 years.

    TLC now has contracts with cable providers and makes back some of the money it pays the producers through the payments from the cable companies.

    Now, TLC can decide to create their own website and make the content available that way or they can allow some other company to create and own a website to distribute the content online.

    TLC can also decide, we need to pay the producers of our shows (as well as everyone on our staff). The big cable companies are paying us and are worried that they won't be able to continue paying us what we want if their customers defect and watch all of the content online. So, we'll sign a contract with the cable company that we'll make the content available on our website, but you have to either prove that you're already a paying cable customer or pay to subscribe to our site to watch the content.

    Since people haven't accepted the concept of micro-payments, and since we like to get lots of different content from lots of different places, it's unlikely that someone will pay $5-10 per month to each network where they want to watch shows. ($5 to TLC, $5 to Cartoon Network; $10 to HBO; $10 to Starz; whatever) Once you have to start making individual subscription payments to each content provider people will start limiting themselves.

    So, we already have this great system where some content providers broadcast over the air (so anyone can watch, basically, for free) and others only broadcast over cable or satellite. If I'm one of the millions of paying subscribers I should be allowed to watch what I pay for online. But if you're not paying for a subscription and helping to subsidize the programming, why should you be able to watch the same content online for free?

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