I’d posted the following to my personal posterous and wordpress a couple weeks back, and shame on me for not auto-posting it over here. In catching up on this past week’s news of Time Warner Cable and Disney’s deal, I thought I’d bring it over to share here w/ y’all more broadly as the song seems to remain the same and may not be changing for a bit…
I’ve spent the past few years living in a Comcast cable market. Coming back to Austin, TX meant coming back to Time Warner Cable, so I’ve only recently been exposed to rolloverorgettough.com. This is TWC’s promise to fight hard for their subscribers in negotiating with those mean, old broadcast TV stations and cable networks.
“In addition, the growth of the Internet has brought countless new video options into consumers’ homes through services like Hulu, NetFlix, Amazon, and the programmers’ own websites. Right now, the broadcast TV networks generally offer that programming free over the Internet — and free over the air to any household with an antenna — but believe that customers who receive the exact same programming from their cable, satellite, or telephone company should pay a fee for it. That’s like putting a tax on the customers who get it from cable, in order to subsidize the viewers who get it for free online or over the air. We just don’t think that’s fair.” (TWC’s emphasis)
As it pertains to broadcast and cable networks feeling like people should pay a fee to get programming over TV but not over the Internet, is TWC saying they’d like to go to the model currently used on TV where those broadcast and cable networks charge TWC (and other cable, satellite and telcos) for the right to carry their programming – carriage fees, 40% of their costs in the TV world? I’m sure the broadcast and cable networks would be happy to have that discussion…
(Actually, they’d probably like to flip the model and have these “network hogs” – i.e. video providers on the Internet – pay extra to ensure better experiences – more on network neutrality separately.)
I’d posted over a year and a half ago on the issue that was brewing at that time between TWC and Viacom as it related to carriage fees and the “not fair”-ness TWC was claiming over video content Viacom was providing for “free” online. There have been more than a few subsequent issues between cable companies and media companies since then, but the song remains the same. Here was my summation then that still seems to be the case now:
“New distribution of programming doesn’t run so well under old monetization systems. In the process of improving the infrastructure of media delivery, access providers and media companies did a short-sighted job of determining the value of the shifts in media usage that they caused by improving the infrastructure. They never developed a model that appropriately valued media usage that is more driven by people’s schedules of desired use via two way cables than their schedules of distribution through one way cables.
So they are left to squabble over which antiquated levers and buttons they can pull and push to make a buck, ultimately, at the expense – in terms of money and, perhaps more importantly, time and convenience – of their most valuable assets: people who pay for access and are fans of programming (not pipes).