Fox may have won its recent retrans fight with Cablevision but the skirmish represents just the beginning of what could be a new era of access battles between the broadcast industry and traditional and new multichannel distributors.
With more consumers attempting to skirt the traditional pay-TV model by viewing programming for free over the Internet and with subscriptions to streaming services, broadcasters are scrambling to manage program distribution in an increasingly competitive market.
There’s perhaps no better illustration of this dichotomy than the recent introduction of Google TV, which launched last month via a Sony HDTV set, set-top box and Blu-ray player. Despite the perception that just about anything with the Google name on it is an instant success, the jury is still out on whether the new platform, which is essentially a Google browser optimized for TV, will become the glue that finally welds television with the Internet.
Minus a guaranteed revenue model, three of the four major networks, ABC, CBS and NBC, along with their Web distributor Hulu.com, are blocking access via Google TV to their programming, (the networks are, however, currently in negotiations with Google, according to published reports). Diluting the effect of lucrative retransmission fees seems to be among the prime motives, according to analysts, who speculate that providing such access would lead to even more cord cutting from pay-TV.
Google execs claim that such blockades mean that broadcasters “misunderstand” the concept of Google TV, but we would politely disagree. Broadcasters understand that Google TV is another distribution platform, albeit one with more potential landmines than the traditional cable/satellite models. In fact, Google TV could represent the biggest attempt yet to redefine the relationship between networks and their affiliates.
And the fact that the company decided to go ahead with the launch of its television service without reaching agreements with the networks implies that either Google made too many erroneous assumptions or that they themselves “misunderstand” broadcasters.
Gerry Kaufhold, an analyst with In-Stat believes that the lack of a current distribution deal with the networks “steals a lot of the thunder from the Google TV launch but it’s not a deal breaker.” As for some of the technical problems regarding connecting to the service, software compatibility and video quality, we cover some of these issues in our cover story “Google TV Debuts.”
But as is the case in our industry, the technology problems can often be solved much easier than the problems of content access. The concept of Internet TV has been around for more than a decade; broadcasters have been fully aware that it would become a reality once broadband became more ubiquitous and a company as powerful as Google finally got its act together. Whether that’s the case with Google TV is still debatable; nevertheless, whatever agreement broadcasters hammer out with the search engine giant could very well be the model for future program distribution. Broadcasters have time on their side—for now.
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