Cable TV Cannot Compete With Live Internet TV
Bewkes chafed when asked by reporters and bloggers whether the Time Warner-Comcast venture was a defensive move. “This is offense with more choice, more immediacy and no extra charge,” said Bewkes. “We’re fortunately in a position wherever this doesn’t cost us much money. We have an advantage and we’re going to use that advantage.”Faulhaber agrees that Live Internet TV Everywhere represents more of an offensive play. If the industry does all of that, all Hulu has to offer is that it’s free. And you can combat free. Bottled water does it. iTunes does it. You just have to get there early.”
However, will companies like Cablevision and Comcast continue to pay content providers such as ESPN and CNN? Or, with its existent subscription receipts model and a foothold on the web, could cable gain enough clout to reverse the longstanding tradition of cable firms paying for content? Or, will the content providers simply bypass cable and orbiter distributors and offer their movies and television programs directly to viewers via the web?
Fader says it’s far too early for such questions to be answered. “These companies have a real incentive to enter with their business model. There will be à la cartead and subscription models. There will be ‘freemium’ free, ad supported services with a subscription option. The cable companies will find that dissimilar models will work well for different types of content.”
Faulhaber says that Internet TV Everywhere has the opportunity to vary the existing model. If cable providers go the dominant dispersion item for content companies on TV and online, they would hold more negotiating power. “Distribution and collection are important, and being part of Comcast and a Cablevision package matters,” says Faulhaber. “That will matter online as well.”
Details about the financial aspects of the Time Warner-Comcast TV Everywhere pilot are sparse. Whitehouse expects the economics of TV Everywhere — like all online video business models — to be fluid. The business case for HBO, which can just extend its subscription-based offerings online, may be different than channels that rely on advertising and carriage fees from cable companies.
The content providers are in a weak position in the video chain because they lack the distribution channels to deliver their shows. Although some cable content providers have web sites that get significant traffic, it is unlikely they can ignore the cable industry’s subscriber base.
With TV Everywhere, the cable companies are at long last spotting onto the fact that TV across the internet is no fad. But is a fast growing revolution that will change the way we watch tv. Now they just have to realise that we wont pay through with(p) the nose for it.
