Cable Companies Want to Control Online TV: Now This Sounds Like a Bad Idea

Enjoy the online TV party while it lasts, because if it is up to your favorite cable companies like Comcast and Time Warner, access to TV shows might soon go behind a paywall that will be controlled by cable or satellite TV providers. Just as the newspaper industry doesn’t know how to react to the new challenges posed by the Internet, the cable industry, too, is trying to remain relevant in a world where appointment TV is a thing of the past. This is due to the proliferation of DVRs where TV networks and producers can just put their content on the web and users can watch these shows on their TVs and in their living rooms thanks to cheap hardware devices from Apple and Roku, and software like Boxee.

Currently, only a few households have abandoned their cable TV in favor of going online only, but this number is probably growing and looking forward. The cable industry is surely seeing this as a threat, especially after analyzing the current state of the newspaper industry, which is facing a very similar situation where free online content is driving readers away from their legacy product.

Authentication

Now, Comcast and Time Warner are about to start a trial with about 5,000 cable customers that would give these households access to TV programs on the web. Of course, the real test here is not whether the cable companies can deliver online TV over their networks, but whether they can figure out a good way to ‘authenticate’ households that have a cable subscription.

Spin: More Choice for Customers

As Om Malik points out, this also opens up the door for possible anti-trust proceedings against the large media companies that are involved here. For now, it looks like Comcast and Time Warner will be working together on this project (Time Warner uses the name TV Everywhere, Comcast calls its system “OnDemand Online”). In this limited first test, Comcast will carry some programming from Time Warner’s TNT and TBS networks.

As expected, the cable companies are spinning this as an innovative agreement that will bring “customers exponentially more free content, more choice and more HD programming online as well as on TV.” In reality, of course, this project is simply a way for the cable companies and networks to protect their revenue streams.

There is, however, also some truth to the cable companies’ claims. A lot of cable networks do not put any of their content on the Internet, as the networks don’t want to jeopardize the lucrative income stream they currently receive from the cable companies.

Hulu, the Elephant in the Room also Wants to Play

As of now, free TV programming online isn’t going to go away anytime soon, but as PaidContent reports, Hulu, the most visible online TV site, is also looking into subscription models and the executives there might not be averse to joining the cable companies’ authentication schemes. At some point in the future then, your cable subscription might determine which shows you can watch on Hulu and similar online TV sites.

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