Tuesday, October 25, 2011

Smaller Cable Co-op Seeking TV Authentication

The big cable MSO's aren't the only ones seeking a TV authentication model, so cable subscribers can access programs on non-TV devices. The smaller cable operators want the same thing, too. The NCTC, Costco for the smaller cable operators, creates deals in bulk with cable programmers. The more customers that take the network, the better and lower the license fee costs. So as a next step, the NCTC "has launched a plan to create a centralized authentication platform for multi-screen services like HBO Go or those planned around the the 2012 Summer Olympics in London." And per the Light Reading article, they are trying to build the service from the ground up rather than buy or latch on to another.

But the challenge that they will really need to work through will be the content deals associated with TV Everywhere. Unfortunately, these same networks will not be humming the Jessie J song Price Tag:

"It's not about the money, money, money
We don't need your money, money, money
We just wanna make the world dance,
Forget about the price tag"

Rather, each network will be asking for incremental fees to enable access to content. Some will offer on demand only, others may be willing to deliver a linear feed. But they each would like additional monies.

Ultimately though, content companies have to buy into TV authentication as a condition of maintaining an audience. Without TV authentication, subscribers will be more inclined to cut the cord and leave cable, reducing the total license fees that cable networks receive. At the end of the day, it's about the money. Subscription fees have hit the wall and customers are getting tired of paying more for cable.

Don't believe me. The perfect example is happening in the news today. Netflix a few months ago raised their prices to a point that caused widespread disenchantment with the product. The result, Netflix lost 800,000 subscribers. TV authentication is a means to give customers another reason to remain loyal to their cable provider. But if the price continues to rise, loyalty will erode, just as it did for Netflix. At the end of the day, it is about "the money, money, money".

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