Don’t Wait. Authenticate.
by Mark Robichaux, Editor in Chief -- Multichannel News, 4/6/2009 2:00:00 AM
Washington — Those of us in the print journalism business know the end is near for most newspapers.
Not a day goes by without another newspaper either laying off employees or worse, going out of business. The reasons are myriad, but when news became a “free” commodity online, decoupled from traditional ad revenue, newspapers’ obituaries were already written.
Today, cable faces a frighteningly similar paradox, and if the key players can navigate the tricky terrain, they could end up creating a money-maker out of a potential disaster.
On virtually every panel at The Cable Show here, online TV — offering full TV programs online — was a hot topic. But cable operators and programmers still seem incredibly far apart for a group that must come together on a business model.
Such a business requires cooperation in an industry with competing interests that hasn’t always had a good track record in big sprawling collaborative ventures.
(The business of VOD, for example, has generated weak revenue and failed to live up to its promise.)
At stake are billions of dollars of advertising revenue if viewers start to consume more and more TV shows through the Internet.
Cable operators are concerned, understandably, about revenue loss to their traditional pay-TV model. They fear customers who may want to cut the cord.
“The big risk we have is, if we don’t offer this programming to them the way they want it, they’ll turn to piracy,” said Time Warner Cable’s Peter Stern on one panel. Moreover, many cable operators believe the fees they already pay cable networks should also pay for their subscribers’ access.
Programmers, on the other hand, see this new business as a potential new revenue stream for online content rights. Many already put their shows on their own sites or other platforms, where they sell ads and build brand loyalty.
But each side is proceeding ever so slowly. At a panel on Thursday, The Walt Disney Co. CEO Bob Iger said that “we are certainly open to exploring” authentication that would allow streaming full networks online. But he said “preventing people from watching any shows online, unless they subscribe to some multichannel service could be viewed as both anti-consumer, and anti-technology, and would be something we would find difficult to embrace.” Not exactly a bear hug.
Both sides certainly agree on one thing: the priority is a technological one. What’s needed is a quick, simple authentication process to confirm that online viewers are subscribers. Still, big questions linger: How should operators and programmers split ad revenue from online shows? What are the ad metrics? Will the content go outside the wall ever? Should satellite TV operators be included?
Several new ventures are tackling the problem in one form or another, including Time Warner’s TV Everywhere and Comcast’s OnDemand Online. But the cable industry can’t act fast enough on this one. Look only as far as the newspaper for the reason why.
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