Cable Operators

Time to Entitle Viewers to VOD at Its Best

6/13/2009 2:00 AM Eastern

When programmers and cable operators get together, the talk inevitably turns to entitlement and authentication.

Even when the nominal topic is video on demand.

Cable operators want programmers to limit Internet access to popular shows to people who are “entitled” because they are paying for that programming via cable subscriptions. Authentication would prove their entitlement. Time Warner Cable is promoting a concept called “TV Everywhere” and Comcast has talked about an On-Demand Online service that would funnel the online extras through its own Fancast.com Web portal.

Operators are worried about losing multichannel-video subscribers because popular programming is available to Web surfers, and programmers are afraid of jeopardizing the subscriber fees they’re paid by aggrieved cable, satellite-TV and telco-TV providers.

At a panel session during our OnDemand Summit in Philadelphia last week, the entitlement topic got caught up in a conversation about a related subject — how basic-cable programmers can make money out of the on-demand video programming they provide cable affiliates.

VOD can help programmers entice viewers to sample new or returning shows. But technical limitations about ad insertion make it hard for programmers to also make money from the people viewing those VOD shows. Still, programmers must provide VOD fare to cable affiliates because affiliates require it to help set themselves apart from satellite-TV providers.

“A great marketing platform is a wonderful thing. But a revenue stream and a business for the programmers would be an even better thing,” Discovery Communications senior vice president of digital media distribution Rebecca Glashow said about VOD during the panel discussion among programmers and cable operators.

She pointed out that the “monetization” issues around VOD have existed for years, and suggested that those are issues that need to be addressed ahead of time before entitlement systems get implemented.

But requiring all cable operators to completely agree on an authentication approach before experimenting with it is a recipe for failure, said Time Warner Cable of New York and New Jersey vice president of programming acquisition and new business development Bob Watson.

“If you’re waiting for that, it’s never going to work,” Watson said. Operators need to experiment with authentication approaches and then let the market decide, he said. (Thus far, as our Todd Spangler reported recently, satellite and telco providers are falling more into the Time Warner camp, which would allow “entitled” subscribers to see the online content they want on the programmers’ own sites.)

I agree with Glashow that free-to-customers VOD would be that much greater a service if programmers can finally make some money with it. That is a key point for programmers who, as they had to go along with VOD, will have to go along with entitlement.

I also salute the operators and programmers still working to improve the VOD apparatus. The television is still where most people most want to consume video. VOD is still a great concept, after all these years and debates.

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