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Desire of pay TV distributors to be gatekeepers to broadband and tablets could increase programming costs

One of the biggest fears among pay-television distributors is that as more content becomes available on new platforms, consumers will cut the cord to their cable and satellite suppliers.

That's why the cable industry is pushing "TV Everywhere," which is basically an authentication service that would require consumers to prove that they are cable subscribers before being able to watch their favorite television shows online. Comcast and Time Warner Cable, the nation's two biggest cable operators are the big drivers of TV Everywhere, but other distributors are also on board.

Now the distributors are turning their attention to the iPad and other tablet devices. Comcast detailed its plans for iPad application that will allow its subscribers to get content on their device and Friday's Wall Street Journal said seven other big distributors are developing their own applications.

The distributors not only don't want consumers to cut the cord, they also want to make sure their programmers don't look to create their own platforms as well. After all, if Comcast is paying an FX or TBS good money to carry their channels, they don't get happy to see their shows available elsewhere.

For now that's not really a risk. Programmers such as Time Warner's TNT and Discovery don't want to risk that revenue stream.

But that doesn't mean programmers won't want more money from their distributors for letting them be the gatekeepers to the Internet, tablets and whatever other platforms and devices emerge in the years to come. If Comcast and others find a way to make a few extra bucks through TV Everywhere and assorted applications, programmers will demand a piece of the pie.

"The programmers are certainly going to want their fair share of that down the road," says Deana Myers, an analyst with industry research firm SNL Kagan.

Walt Disney Co., parent of ABC as well as cable networks ABC Family and Disney Channel, has not said what its plans are regarding TV Everywhere in part because it wants to be paid for allowing distributors access to their content on the Web. 

"Disney has been kind of playing on their own to see if they can do it better than some operators," said Kagan's Myers.

Of course, any real effort by distributors to stop programmers from offering their content elsewhere would not likely be met with a great reception by regulators. However, the distributors can use their leverage to try to lower the fees they pay for content if programmers insist on putting their shows on platforms that can undercut their incumbent distributors. 

— Joe Flint

Comments () | Archives (2)

First off, I would think that the owners of the content are free to determine the parameters of the rights to use their content and thus could ask for compensation for the additional usage of the content. It looks like the TV Everywhere model is not new. Right now, Sirius XM and satellite radio require users to pay for the rights to access the signal via internet or on mobile device. If the programmers start restricting the content or demanding excessive fees for the new additional modes where the content can be accessed, it will only mean higher costs for consumers. In any event, it looks like the average customer stands to lose in all of this.

I wanted to make a comment here in TV Everywhere. I work at DISH Network and I have been able use the TV Everywhere concept. The Sling Media allows you to view all your subscribed programming that you pay for through DISH where ever and when ever. I see this as being something that will play a major factor on how we watch TV in the future. Now maybe cable providers may put a price increase for this DISH offers this at no additional charge.


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