Wednesday, June 24, 2009, 11:15 AM ET|Posted by Will Richmond
This morning I listened in on the press conference with Comcast CEO Brian Roberts and Time Warner Inc. CEO Jeff Bewkes where they announced a 5,000 subscriber technical trial of TV Everywhere/OnDemand Online starting in July along with a set of "principles" guiding their efforts. Primarily the trial will test the security of the authentication technology.
TW will make available TNT and TBS programs in the trial, and will offer additional programs over time. Comcast plans to bring in other networks too. Both executives emphatically stated that for cable subscribers there will be no additional charge for online access. The companies clearly hope to use the trial and the publicity that will surround it to galvanize interest from other cable operators and programmers.
The partnership effectively unifies the companies' disparate initiatives so that paying video subscribers will be "authenticated" to receive certain cable network programming online. Up until now Comcast has been pursuing its own vision of online access under a plan it dubbed "OnDemand Online," while TW has been pursuing a plan it called "TV Everywhere." The essential difference between the two, as I wrote about here, was that Comcast planned to only make programs available on its owned sites (at least initially), which TW talked of multiple third parties gaining access as well, right off the bat.
I've been critical of TW's approach to date as I thought it was wildly ambitious and under-estimated the technical challenges involved in pulling off third party integration. On the other hand, Comcast's walk-before-you-run attitude seemed far more practical. On the call, Mr. Bewkes in particular continued to downplay the difficulty of authenticating third parties, a position I think is unrealistic.
Regardless, I've been supportive of the general idea that paying video subscribers gain online access to cable programs. While some decry this as antithetical to the open, free-flowing Internet ethos, and a plot by evil cable companies to control video on the 'net, I've seen it differently.
The key is finding a model that's attractive to cable programmers (e.g. MTV, USA, CNN, etc) and consumers. Programmers benefit because they'd be provided with a viable online extension of their proven hybrid (monthly affiliate fee + advertising) business model. Until now they've been largely shut out of online distribution. That's because doing so for free would antagonize their cable/satellite/telco distributors who pay them around $25B/year. And that's before the point that free, ad-supported premium sites like Hulu have not yet proven themselves economically viable. Meanwhile, aside from a la carte paid download sites like iTunes/Unbox/others there hasn't been an online subscription model available to programmers.
These are some of the real, but often not well-understood business issues. Everyone wants something-for-nothing, and the Internet has too often set those expectations. But cable programmers need to get paid for their efforts so they can continue to deliver the quality programming consumers have grown accustomed to. The newspaper industry's woes offer tangible proof of what happens to an industry when its proven business model gets stripped away.
Despite what some skeptics say, consumers also stand to gain. All that great cable programming that's been locked to the set-top box in the home would now be available online. It sort of like cable's version of on demand Sling, but without any upfront or monthly charge (at least that's what we're hearing for now).
With TV Everywhere/OnDemand Online, Comcast and Time Warner are taking a solid step forward in delivering more value to their subscribers who increasingly live their lives online. Now they need to tamp down the hype and just focus on executing in a logical, user-friendly way.
What do you think? Post a comment now.