02/26/2009 (12:36 am)

Cable, TV networks negotiate new deals for online viewing

Filed under: marketing |

PHILADELPHIA — HBO on your PC? It could happen sooner than you think.

Wary of the growing number of consumers watching TV shows online for free — and yet reluctant to upset viewers by yanking shows from the Internet — the nation’s largest cable operators are in talks with media conglomerates to take back control. They would set up a platform to release cable TV shows online, but exclusively for paying subscribers.

It’s a delicate dance for the cable TV service providers and the owners of the cable networks.

Potentially at stake is the business model of cable television. The service providers pay networks a per-subscriber fee each month for the right to carry channels. But the cable companies have groused that they are paying for content that programmers are giving away for free on the Web.

Jeff Gaspin, president of NBC’s Universal Television Group, said that the idea of collaborating with cable operators on online video had been floated for a while but that talks began in earnest this year.

"There’s pressure on all of us," he said, referring to TV networks. "We get paid quite a bit of money from cable operators. … It’s important we find ways to do business that protects that business model."

At the same time, "consumers want content where they want it and when they want it," Gaspin added. If the networks don’t provide it, "they’ll get it any way they can."

Gaspin and others familiar with the project said the new service would probably be free to cable TV subscribers. But a small fee might be assessed.

Sam Schwartz, executive vice president of Comcast Interactive Media, said the company wasn’t looking at the effort as "some enormous new revenue opportunity" but wants to add value that will keep customers from leaving short term personal loan. Comcast calls its initiative "On Demand Online."

One model being discussed is for Philadelphia-based Comcast to expand its lineup of cable shows on Fancast.com, its website that aggregates TV shows and movies for free viewing, much like Hulu.com. But only subscribers could access the shows. It’s not yet clear how subscribers would be authenticated; it would be easier if the customer also buys high-speed Internet service from the cable company.

Other cable operators wouldn’t create a new website, but they would steer subscribers to the cable networks’ websites, such as HBO.com, where they would be able to see an expanded array of shows.

About 34 percent of adults who go online at home watch videos over the Internet at least every week, up from 25 percent two years ago, said a survey released Monday by Leichtman Research Group.

People aren’t yet cutting the cord en masse — the Leichtman survey found that people who watch recent TV shows online every week are not more likely to give up TV service than other people. But the industry is heading off what could end up as a troubling trend. After all, the availability of free content online has befuddled other media industries, from music to newspapers.

The cable companies and others involved in the talks for a TV service said their goal wasn’t to kill the online video goose, but to work out a plan that would keep everyone’s business intact.

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