Amid the rush to make programming available for free online, Time Warner and Comcast are fighting back. The companies on June 24 announced a new model that will require viewers to prove they are cable subscribers before they can stream hit shows online. The announcement puts both companies squarely into the fray of a growing debate over whether people should be forced to pay for content online instead of getting it for free.
In outlining their plans at a press briefing, Time Warner and Comcast carefully framed the initiative as just another way to give consumers programming when and where they want it. “This marks the very logical next evolution of cable TV,” Time Warner CEO Jeffrey Bewkes said. “Consumers have spoken, no, more like yelled.”
What the executives didn’t address is the direct threat to their business model because consumers can already get a lot of programming for free, on such sites as Hulu.com, owned by News Corp., NBC Universal, and Disney. The concern for cable is that as more programming becomes available at no charge, consumers will drop pay-TV subscriptions. Such so-called cord-cutting is not occurring yet in big numbers; Time Warner and Comcast want to keep it that way.
They hope other TV networks and service providers will join the effort. A big incentive: More than half of cable networks’ revenue comes from the fees that service providers such as Time Warner and DirecTV pay. Nobody wants to jeopardize those dollars in tough negotiations with angry service providers upset that programming they pay for is also being given away by the channels for free.
Trial Run, Then National Rollout
Here’s how the trial will work: Starting in July, 5,000 Comcast subscribers will be able to see shows online from Turner Broadcasting’s TNT and TBS channels, like The Closer and Tyler Perry’s Meet…