Friday, March 25, 2011

Content vs Distribution: Cable vs Network

The new Time Warner Cable App, offering its customers live feed access of its channels on mobile devices, has raised the ire of the programmers. It seems the right to show a network on a channel position through a cable wire into the home does not extend to streaming media. And Time Warner Cable has read its contracts and figures that they have the rights to in-the-home mobility. "Melinda Witmer, chief programming officer for Time Warner Cable, said in an interview that her company is "well within our rights" to transmit TV channels to any device in the home, as long as it sends signals through its cables and its "secure network," rather than the "open Internet." For that reason, the app is specifically configured to work only when linked to a subscriber's home Internet connection." But is this the real fight?

It seems that this in-home access will not be enough for the tech savvy consumer. They want the same access outside the home too. And the consumers preference is to pay once and watch anywhere and everywhere. The Time Warner App is only a small step to this next model. It is a slippery slope and one that programmers don't want to take. They want to be paid for each distribution platform that their network is placed on. "Meanwhile, TV executives have reason to be wary. Some executives see an opportunity to make more money by selling shows and networks to companies like Apple and Netflix Inc. over the Web. They aren't eager to give those rights to cable operators without additional compensation." At the end of the day, it is all about the revenue.

It has become a more contentious relationship between programmers and operators. Programmers see new revenue streams while operators are trying to save their existing base. The challenge may be for operators to show programmers that their revenue is also at risk should viewers switch to other platforms. But as the nature of their relationship continues to erode, it may be difficult to find common ground.

The cable operator not saying much is Comcast. While Time Warner Cable divested itself of its programming, and Cablevision is planning the same with its Rainbow programming business, Comcast is the only operator left with both a distribution and content business. In fact, it may just be what makes Comcast most adaptable to its consumers' demands.

1 comment:

  1. You're right, Andy. Customers want access to their programming content outside of the home, which is why I think TWCableTV's app is a little silly. As a DISH Network customer/employee I'm able to easily watch all of my live TV channels and DVR recordings on the go, as are all customers with the right equipment. It's pretty amazing and I haven't seen any of the repercussions that TWC is seeing and I've been able to do this for like 7 months now.