Does 'TV Everywhere' Restrict Choice, or Increase It?

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Comcast and many cable programmers say TV Everywhere-style services — like Comcast’s Fancast Xfinity TV, now available to around 14 million of its broadband and TV customers nationwide — will increase consumer choice, by letting pay-TV subscribers watch shows and movies that otherwise would not have been available online.

It’s cable’s plan to avoid getting ravaged the way newspapers and the music industry have in trying to adapt to the Internet. TV Everywhere, the argument goes, ensures video programming on the Web continues to be supported by a paid subscription base.

But consumer advocates say TV Everywhere is anticompetitive. They said so back in June, when Comcast and Time Warner Inc. first described their partnership to bring additional cable programming online for no extra charge (see Interest Groups Blast ‘TV Everywhere’ Plans).

The activists are back in the fray today, with Free Press claiming “the new business model poses a serious threat to online video competition.”

How so? According to Free Press’s Marvin Ammori, “These are transparent efforts to preserve the cable cartel that gouges consumers. Comcast wants to be the gatekeeper to the video programming world. This service is a threat to innovative online video and an attempt by the industry to impose the cable-TV model onto the Internet. If Comcast is not attempting to stifle competition, then why is it only available to Comcast cable subscribers and not nationwide for all Internet users?”

Moreover, says Ammori, “Comcast’s power to manipulate online video is particularly troubling as the cable behemoth prepares to gobble up NBC Universal.”

First of all, there’s no question that Comcast’s Xfinity TV is aimed at trying to retain subscribers — to give them reasons to keep paying for cable, in the face of growing competition from sources of online video. Competitive threats are exactly what is driving TV Everywhere.

But there’s the other allegation — that Comcast’s Xfinity and other TV Everywhere-style services are an attempt to choke off online distribution.

Free Press, and previously Public Knowledge, compare TV Everywhere to efforts by MSOs to block programming from competitive services — such as the so-called loophole in FCC regulations that allows cable operators to withhold terrestrially delivered services, which the commission is now moving to close (see FCC To Propose Ending Terrestrial Exemption: Source).

But the comparison here is specious: With TV Everywhere, cable programmers are free to cut deals with whomever they please. Indeed, Verizon, AT&T and DirecTV are each cooking up their own flavors of TV Everywhere. Comcast may be the first and most public but they’re not the only game in town.

On the other hand, why couldn’t programmers just go directly to consumers with premium content and bypass the distributors altogether? Disney, for one, has contemplated just that with Hulu or other Web services (see Hulu Could Charge Subscriptions, Says Disney’s CEO) — a bit of saber-rattling, perhaps.

Starz has taken heat from some MSOs for inking its streaming deal with Netflix, which lets people watch the Starz channel and movies on-demand on their TVs with a Roku box or another Netflix-enabled device (see Starz Entertainment’s Clasen Dishes on Netflix Pact).

To me, the marketplace is the best place for these questions to play out.

The Comcast Xfinity service, which offers paying subscribers access to more content online (thereby increasing the value of the bundle), will not prevent content owners from finding the best ways to reach their audience, online or anywhere else — in fact, it’s likely to speed that up, by demonstrating how video services can be packaged and monetized via the Internet.

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