Top cable television services including Comcast and Time Warner Cable, and TV network owners Viacom, Time Warner and NBC Universal are exploring a sweeping solution to the threat of online video: putting large numbers of cable shows online, but accessible only to cable subscribers. The cable networks include USA, TNT and MTV.
The cable operators hope the new Web services, which could launch this year, will attract new subscribers -- even given the popularity of free-to-watch Web sites such as hulu.com -- by offering a wealth of previously unavailable video.
Cable networks and operators have a big stake in preserving the cable TV business model: US cable, satellite and telecom operators paid cable-network owners about $22.5 billion in subscription fees in 2008. Citing those fees, cable operators have placed limits on how much free content some networks can put online.
The programming available on the proposed Web services would likely be in a streaming format with ads, accessible in and out of the home, and without any additional charge to cable TV subscribers.
Under the arrangements being discussed, existing cable subscribers could access content online that goes well beyond what is currently available free to consumers,
Major cable operators -- Time Warner Cable in particular -- have said that the proliferation of free video content online threatens to undermine the subscription business model for the cable-TV business. "If all of the programming goes to the Internet, and it's free, then there is a whole source of revenue that the entertainment business is not going to have anymore," Glenn Britt, CEO of Time Warner Cable, said last year.
Beside the technical hurdles, some critics say it might be too late to put the online-video genie back in the subscription bottle. A growing number of people are growing accustomed to watching TV shows online, without any charge. About 136 million people watched online video content in January, up 16% from the same period in 2008. (info from The Wall Stree Journal)
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