Will Workman /
04.03.2009 12:00 PM
TV Anywhere Equals Free TV Nowhere?
Like some morbid meteorologist, over recent months I have been watching the broadband video landscape as it darkened under gathering storm clouds.

Already blighted by billions in operator debt, media conglomerate profit demands, slumping advertising, benighted customers, and the unstoppable torrent of technological shift, that landscape was ripe for further battering.

Once there had been happier days, when creators, programmers, advertisers and deliverers had shared in the copious bounties of the content boom. The prospect of a broadband Internet, while daunting, always seemed less forbidding as long as cash flow stayed healthy. "Monetizing" online content was the buzzword, invoked by numerous promising partnerships designed to leverage the broadband pipes.

Then came the meltdown, wilting all those rosy deals.

As March dawned with no break in the maelstrom, in stepped the indomitable Jeff Bewkes.

As head of Time Warner, running the most powerful stable of cable services (including HBO, TNT, Cartoon Network and CNN), Bewkes had been watching warily over the past year as his competitors sorted out their emerging broadband strategies, with the only noteworthy success, the Hulu venture of News Corp. and NBC Universal.

Not wanting to wait further, Bewkes announced in March a bold stroke: an industrywide initiative, dubbed "TV Everywhere," which would make cable content available free online to anyone registering as a cable/satellite subscriber.

HULUS, HULUS, EVERYWHERE

This content would include top shows that Bewkes and network bosses had been withholding from their various streaming ventures. And it would make that content available on multiple platforms, including Hulu and even YouTube, accessible through any Web-enabled device.

The premise appears simple: if you pay for it as a TV subscriber, you can watch it online. And that applies to your spouse and your kids, according to Time Warner's stated intent to apply its "subscriber" definition broadly.

"This is not just for the cable industry," Bewkes said. "It's about keeping the health of all these fantastic networks while making them available at no extra charge on the online platform."

Though he'll face a steep challenge gaining the critical mass needed for TV Anywhere's success, Time Warner has already launched talks with Hulu backers NBCU and News Corp., operators, and other network conglomerates, including Disney and Discovery.

Both sides have a compelling self-interest: networks don't want to see the half of their profits that come from advertising eroded by online viewing; operators don't want their subscribers "cord-cutting" in favor of free online viewing.

Another major factor that may get network compliance, as some industry insiders have pointed out, is that the process could account for online viewers in calculating network ratings, which would enhance resulting ad rates. Estimates of online audiences for some programs could boost overall show ratings by 10 percent or more—not insignificant when the economy is tanking and you're begging advertisers to keep their business.

FAULT LINES

TV Everywhere faces numerous challenges, including efforts by the cable operators themselves to mount their own versions of Hulu. Comcast, the nation's largest MSO, has been working on its On Demand Online Web service, and its Web video subsidiary thePlatform recently confirmed it is working with operators to integrate authentication processes into their Web video plays.

But Comcast also said initially that its service wouldn't have to compete with, and could complement, TV Anywhere.

Another source of worry for the cable guys: Web video ventures such as Netflix, Apple TV and Amazon's Unbox that are forging ahead with compelling content outside the cable programmer/operator alliance.

These ventures are inking deals with studios and content creators, who can reach audiences directly via Web streaming, or play delivery vehicles off against each other.

"South Park" creators Matt Stone and Trey Parker were remarkably prescient in this area.

Over a decade ago, they launched their little show on a cable network, Comedy Central, that had yet to achieve anything close to a breakout hit (this columnist was one of the first reviewers to bestow that title on "South Park"). They were also savvy enough to ask for a 50/50 split of any non-TV revenues (remember, this was 1997, the dawn of broadband).

After cashing in on that foresight, they've gone a whopping step further: last month they announced a deal to distribute "South Park" on Netflix, reportedly foreswearing competing offers from Hulu and Joost for an undisclosed sum of cold hard Netflix cash.

While the deal scored by Cartman's creators seems to confirm a trend, it's still an open question as to whether cable cord-cutting (the equivalent of that for satellite) and the migration to online viewing are having such a major impact on TV viewing and cable subscriptions.

While Time Warner Cable (no longer teamed with Time Warner Entertainment or AOL—that was another victim of the meltdown in recent years) has reported flat growth in subscriber numbers, and Nielsen surveys indicate fourth quarter 2008 online viewing was up significantly, to two hours and 30 minutes a month, overall TV viewing is up as well, to more than 142 hours per month.

So is the Recession Couch Effect countering any major damage to the prized TV revenue stream? Or will folks be turning even more to Netflix and other less expensive alternatives, making Stone and Parker even more genius-ified?

Bewkes isn't waiting to find out.

Will Workman is a former editor of telco industry publications Cable World and MediaView. He is now working on his Ph.D. in mass communications. He can be reached care of TV Technology.


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