05 March 2012

The Wall Street Journal


Plans for 'TV Everywhere' Bog Down in Tangled Pacts

It was dubbed "TV Everywhere." But for many TV viewers, it has had trouble going anywhere.
Nearly three years after  and Comcast Corp.kicked off a drive to make cable programming available online for cable subscribers, the idea of TV Everywhere remains mired in technical holdups, slow deal-making and disputes over who will control TV customers in the future.
Now some media executives say the effort, aimed at insulating cable television against a rising tide of cheap online video alternatives, risks getting left behind—a concern that found voice last week at two different industry conferences.
While some cable programming is available online, much isn't, or is available only to subscribers of certain pay-TV providers. That is because TV Everywhere—which is a concept, not a specific service—requires a lot of deal-making.
Each cable operator, phone company and satellite-TV provider must negotiate separate agreements for online rights to every cable channel. So far, just a few companies have reached wide-ranging deals.
At the same time, the availability of alternative online video is exploding. Google Inc.'s  YouTube is spending hundreds of millions of dollars funding new channels that are available anywhere. Netflix Inc.  is ramping up spending to buy reruns and now original shows—like a cable channel but without the rest of the cable bill.
The danger for media companies, some TV executives say, is that a new content garden is growing up outside of cable TV's walls.
"We have to move much faster," said Jeff Bewkes, chief executive of Time Warner, at one of the investor conferences last week. "And if we don't, we do risk letting others take this opportunity."
Comcast offers subscriber-only online access to current TV shows, such as Showtime's 'House of Lies.'
TV Everywhere is part of a larger effort in many quarters of media, including newspapers and magazines, to build or reinforce subscription paywalls around their content in the digital age.
One sticking point on TV Everywhere, however, is how cable operators should compensate a TV channel to make it available online for subscribers. Discovery Communications Inc. DISCA +0.20% Chief Executive David Zaslav, speaking at the conference, described TV Everywhere as "a very favorable platform," but added: "We need to figure out what the right value is for that."
Another big hang-up is advertising. While Nielsen measures Web viewing of shows that air exactly the same ads as on traditional TV, it doesn't yet do so on tablet computers. That makes widespread adoption of TV Everywhere difficult for channels that are more ad supported, like Scripps Networks Interactive Inc.'s SNI +0.34% Food Network. (Nielsen says it is testing a way to include Apple Inc. iPad viewing as part of TV ratings, and expects to "share additional details" in the second quarter.)
As a proponent of TV Everywhere, Comcast has been aggressive with its own website and app—called Xfinity—which offers subscriber-only online access to various current TV shows like TNT's "Southland" or Showtime's "House of Lies." The company recently struck a wide-ranging deal with Walt Disney Co., DIS -0.55% which includes online access to networks including Disney Channel and ESPN, and could be a template for other deals.
Time Warner, likewise, has rolled out a TV Everywhere version of its HBO channel—called HBO Go—and has struck deals with cable operators to make it available to essentially all HBO subscribers. But while Time Warner has other similar offerings like a live online feed of CNN, not all providers carry them. For instance, Time Warner Cable Inc.'s TWC -1.35% 11.9 million video subscribers don't have access to live streams of college basketball's March Madness games on Time Warner channels.
Big media's goal with the online paywalls is to preserve lucrative offline subscription businesses as consumers increasingly watch and read over the Internet.
Subscription fees are crucial to the survival of many cable-TV channels, which reap nearly $38 billion a year from households' cable bills, according to market-researcher SNL Kagan. But even if TV executives agree that it is a good idea to protect that business with something like TV Everywhere, they don't all agree on where the networks should be available online.
The reason is that new apps from TV networks—like HBO Go and WatchESPN—threaten the traditional monopoly that cable operators have had on interactions with TV viewers, from the interface on a set-top box to the monthly bill in a mailbox.
The new apps give networks the opportunity to be in direct contact with consumers, sometimes for the first time. That allows the networks to collect email addresses and other information about their viewers directly, and could eventually make it easier for channels to compete with cable operators—or survive without them.
That potential for conflict has bogged down TV Everywhere's rollout, as cable operators and TV channels wrangle over whose websites and applications subscribers can use to watch shows online. For instance, News Corp NWS +1.22% . and Disney have so far insisted that they will include shows from their broadcast networks in TV Everywhere only if subscribers also can watch them through their joint-venture online-video site Hulu LLC.
(News Corp. also owns The Wall Street Journal.)
But many pay-TV providers, including Time Warner Cable, have resisted, with some cable executives arguing that Hulu is a "Trojan horse" that could eventually compete with them.
A Time Warner Cable spokeswoman said that the company, which was spun off from Time Warner Inc. in 2009, doesn't want its customers to pay extra for content that is available free elsewhere online.
The question of controlling the consumer experience is also a factor in why Comcast blocks its subscribers from watching TV Everywhere content on devices where the cable giant isn't releasing its own TV Everywhere app.
As a result, Comcast subscribers can't use the app that HBO released last fall for Roku Inc.'s set-top boxes that stream Web video on TV.
"One of the principles behind TV Everywhere is the mirrored approach," said Marcien Jenckes, senior vice president and general manager of video services for Comcast. "We want to do things holding hands."
Like many things about TV Everywhere, however, not everyone agrees on that point.
Some providers are trying to "hold the customer to themselves," says Dave Shull, senior vice president of programming at Dish Network Corp., DISH +1.24% which is currently the only pay-TV provider to allow its subscribers to sign in to Hulu to watch shows from News Corp.'s Fox network the day after they air.
Of subscribers, Mr. Shull says, "I'd rather let them tell us where they want to view the video."
Write to Sam Schechner at sam.schechner@wsj.com
A version of this article appeared Mar. 5, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: Plans for 'TV Everywhere' Bog Down in Tangled Pacts.







<< Back