I've written a number of times (here, here, here) over the last few months about the recently disclosed plans from Comcast and Time Warner to deliver cable programs online to their paying subscribers. In general I'm a big fan, as these plans offer the potential for users to watch cable shows online that are mostly available through in-home set-top boxes only today. I'm also encouraged that cable operators seem to be going on the offensive to satisfy their subscribers' desire for anytime, anyplace access to content they're already paying for. Being offensive will certainly help mitigate "cord-cutting" tendencies.
However, if there's a fly in the ointment in these plans, it's how the cable subscriber will be "authenticated," or recognized as qualified to access that particular content at the web site where he/she's trying to watch. This is a crucial step because again, these cable operators only plan to provide access to paying subscribers of their traditional video services. To understand this how Comcast is approaching authentication, last week I spoke to Sam Schwartz, Comcast Interactive Media's EVP of Strategy and Development, and president of Comcast Interactive Capital, who is a point man for the company's OnDemand Online initiative.
Overall, Sam explained that the company is still working through how best to authenticate online users and keep content secure. Users will need to log in and then have their credentials checked to ascertain what programming they're entitled to. So the crucial step here is opening up traditional cable billing systems for access by web sites serving up the desired content. This isn't trivial because these billing systems weren't originally built to do this. Therefore there's a need for some type of entitlement database which must be pinged with the user's credentials to verify content access.
To prevent leakage in the authentication process Sam said the company is studying best practices from other digital providers. iTunes is one model which limits content availability to 5 devices. Alternatively, if access is within the home, then Comcast, as a large broadband ISP, would be able to verify IP addresses. Yet another method would be to require a credit card, which would disincent credentials sharing by subscribers. Two Comcast companies, thePlatform and Plaxo are playing key roles in supporting both the content management/distribution and user identification.
All of this is magnified because Comcast's programming partners rightfully expect that any content Comcast is distributing will be done so in a fully secure manner. In the digital TV realm, this has traditionally been handled by the set-top box and "conditional access" software in the headend (a cable operator's distribution hub). Paid online services which are connected to incumbent video services present new issues which free ad-supported sites like Hulu and YouTube haven't had to address.
Sam said pulling all of this together has been a major project, involving 100+ people throughout the company. The complexity becomes quickly apparent as this initiative touches so many different areas - video product management, technology, operations, billing, content acquisition, customer service, online media, etc. Partly as a result of this complexity, Sam explained that at the outset simply enabling its own sites like Fancast or Comcast.net is the goal. Other 3rd party sites may come on board later, only after the model is proven in.
Though it's evident that Comcast is taking a "walk before we run" approach, Sam emphasized the company is moving this along as fast as possible. Its goal is to be in the market this year with OnDemand Online. While the utopian gadflies are already decrying these kinds of paid access services, I think they balance multiple interests well, and will help to preserve the multi-billion dollar video value chain from decomposing into a free but profitless quagmire (like other media sectors have already). If all this ends up working properly, it will be a major milestone for the video industry in general and broadband video specifically.
What do you think? Post a comment now.
(Side note: I was also encouraged to see Time Warner move Turner Broadcasting System veteran Andy Heller to vice chairman yesterday overseeing its networks' push for "TV Everywhere." His role as champion of TV Everywhere gives the initiative added heft. Still, the bottom line here, as explained above, is that the back-end technology must be in place before any programming starts to flow. I hope he has this priority in his new role.)