Will Internet TV Charge Ahead?


Cable may want to rethink the notion that TV subscribers would feel "entitled" to getting programming online without paying for it.

The biggest U.S. cable operators -- Comcast, Time Warner Cable and Cox Communications -- have been attempting to secure distribution agreements from programmers to provide an expanded collection of video content online.

The MSOs have held talks with NBC Universal, Viacom's MTV Networks, Turner Broadcasting System, Discovery Communications and Scripps Networks, according to an executive familiar with the negotiations.

Comcast may introduce an "On-Demand Online" service sometime this year, but the executive cautioned that basic details of how the service would work have not been determined, such as whether it would provide downloadable or streaming video.

Also up in the air: whether the operators would offer that Web content for free, or whether they'd levy an extra fee. A research study released earlier this week, however, suggest a number of consumers would be willing to pay for such a service.

Roughly 28% of broadband consumers would willing to pay at least $10 per month for a service that provides their linear pay TV content on their PCs, according to a survey of 2,000 adult U.S. consumers conducted in January by research firm The Diffusion Group. The remaining 72% are either not interested in an Internet TV service at all, or would not pay for it.

DiffusionGroup president Michael Greeson argued that providing an Internet TV service with cable content for free, as an "entitlement" to existing pay-TV subscribers, risks undervaluing the content "which has for years driven subscriptions."

"The only TV content available in abundance for free on the Internet is either user-generated or from the broadcasters," he said.

Greeson estimated that Comcast could generate more than half a billion dollars per year with an Internet TV offering. That's assuming 28% Comcast's broadband Internet subscribers -- or slightly more than 4 million -- spent an extra $10 per month to have their current TV programming delivered to their PCs.

Whatever shape the MSOs' Internet TV services take, Comcast's thePlatform already has said it expects to be providing the infrastructure to power them. ThePlatform already counts among its customers Comcast, Time Warner Cable, Cox and Cablevision Systems.

"With a strong technology foundation to stand on, we're investing the time and energy to enable this vision. Stay tuned for more," thePlatform CEO Ian Blaine wrote in a blog posting last week.

Blaine also outlined the rationale for the plans, which conceptually would provide TV programming online to cable TV subscribers.

"If this is embraced by operators and programmers it means that subscribers will have greater access to the fantastic content that to-date has not been published online," he wrote. "The main point is that this is additive to the rich universe of online video."