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Viacom sues to prevent “Free online lunch” for cablecos

The uneasy alliance between cable network owners and cable operators has always been a tense one, with few prisoners taken and no mercy asked or given


Published: 14 April, 2011


The uneasy alliance between cable network owners and cable operators has always been a tense one, with few prisoners taken and no mercy asked or given, but the battle lines being drawn over tablet content threatens to open up new wounds. This week Time Warner Cable , the second largest cable operator in the US has been sued by Viacom, probably the largest US provider of cable networks – TV channels that run on premium pay TV services.

Time Warner Cable has been pushing the TV Everywhere idea for a full two years and is largely thought of as the concept’s inventor. TV Everywhere is simply the idea that content which is already paid for in a pay TV service can be delivered to multiple screens, whether or not that’s in the same home or available on a wider footing Over The Top. Quite simply if you are a cable TV operator the important fact is that it goes over your infrastructure, to your clients and is viewed in the same home which terminates that infrastructure. If you are a consumer that’s not it.

This is, quite simply, not what the consumer wants. Look elsewhere in this issue and you will find a separate story we are covering on an Accenture consumer survey on just what they would like from internet video. The consumer wants to view his or her content literally everywhere, not in the same place, or over the same infrastructure which pay TV comes over.

A consumer is happy knowing that he or she has paid for the content and can watch it wherever they go, and that includes over the internet on another TV set, in someone else’s home, as long as the viewer with the password is physically present. Placeshifting offered that and it was set to be a big winner, but Dish Network went and bought the prevalent place shifting technology business, Sling Media and that signaled other pay TV operators NOT to play ball with the technology because it was owned by a rival. However placeshifting consumers love the technology, although there aren’t many of them.

A well-kept secret in the UK is that BSkyB has been offering this type of viewing over ANY broadband line, totally over the top, for over three years – including channels with live sports content.

What has stopped US owners of pay TV providers like DirecTV doing the same thing, is that they couldn’t get away with it - content owners made it clear that they need to be paid each and every time a viewer has access to their content over a different method. This is the curse of content owners – they believe that delivery in a cinema, to a DVD, over a Pay TV network, on a pay per view channel or on VoD, and then buried in a repeats channel ten years later, are all separate pay days. Anything else and they are sure they are being ripped off.

Sky in the UK has many of the TV channels it delivers itself, and has been able to force content contracts to supports the real TV Everywhere business model, where it has taken US content which is not from its cousin company Fox, it has been negotiating a non-core territory, not US rights. It is because of this that BSkyB can join in with YouView in the UK and offer its entire content over the internet to a new type of set top box. But this was never going to happen in the US.

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