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Thursday, July 23, 2009

Online video: Pay or free? Wharton profs rate Comcast future

Penn's Knowledge@Wharton writes, in an article titled Cable TV Follows Its Subscribers to the Internet:

- Cable TV is under "increasing threat from Internet video sites such as YouTube and Hulu".  NBC, Disney, Viacom give shows away online. Slingbox pumps TV shows to mobile phones and PCs.

This free Internet TV "is very disruptive and attacks the model of cable television," says business and public policy Prof Gerald Faulhaber. But "you can fight free. Bottled water does it. iTunes does it. You just have to get there early."

- "The plan: Make cable subscriptions portable" to laptops and mobile phones, "no additional charge." Comcast and TimeWarner's TV Everywhere starts testing this month with TNT and TBS; CBS, HBO, Cinemax, Starz on tap. If cable "gets it right, it will be huge. However, the chance of cable getting it right and becoming dominant are slim," says marketing Prof Peter S. Fader.

- "Americans viewed 16.8 billion videos online in April," nearly half on Google's YouTube, says comScore. More than one-third of viewers surveyed "would consider cutting a cable subscription in favor of online video in the next five years" due to "cost and more content choices," says Bernstein Research's Craig Moffett.

- If cable and its satellite TV rivals "become dominant," programmers like ESPN and HBO could end up paying Comcast or Dish Network to carry their shows, reversing the current model. Faulhaber thinks that could happen. "Content providers are in a weak position... They lack the distribution channels to deliver their shows," while cable and satellite "can bring in a bigger audience." Hulu sells ads; YouTube is subsidized by owner Google; but cable companies know how to get paid every month.

- "Will cable companies like Cablevision and Comcast continue to pay content providers such as ESPN and CNN? Or, will the content providers simply bypass cable and satellite distributors and offer their movies and television programs directly to viewers via the Web?" Can we get rid of the middlemen? Probably not: The cable and phone companies still control Internet access.
Posted by Joseph N. DiStefano @ 7:59 AM  Permalink | 2 comments
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  • Comment removed.
  • 0 like this / 0 don't   •   Posted 2:03 PM, 07/23/2009
    If it weren't for sportsnet, I wouldn't have comcast. If I could pay to watch local games online, I wouldn't have cable. At this point cable is just an unneeded middleman, pricegouging its way into obsolescence. There is absolutely no reason to have constantly streaming channels anymore, even live events can be streamed online, like the MLBTv service. Its a waste of energy and money, that gets passed along to the consumer.
    — Pelti


2 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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