Comcast, Time Warner Team Up to Control TV on the Internet

Updated: Sometime tomorrow, Comcast and Time Warner will announce a partnership to promote the concept of TV Everywhere. Jeff Bewkes, chairman and CEO of Time Warner, and Brian Roberts, chairman and CEO of Comcast, will have a joint media conference tomorrow in New York. The deal makes it painfully obvious that everything cable companies do — including introducing the draconian metered broadband policies — is done to save their video franchises.

With the pervasiveness of broadband and easy availability of tools that allow web video to leap onto your television, cable companies see that their video distribution pipes are becoming less relevant. So they want to control how you watch premium content online and want to impose fees via an authentication system.  Time Warner and Bewkes have been championing this concept — essentially an authentication system that requires viewers to have cable, telco or satellite subscriptions in order to watch certain premium content online or on other platforms. Bewkes recently said he wanted to launch the system during the second half of 2009. (NewTeeVee has just published a great FAQ on TV Everywhere.) Time Warner spun out its cable business as a separate company. Time Warner owns premium services such as HBO. [digg=http://digg.com/tech_news/Comcast_Time_Warner_Team_Up_To_Control_TV_On_The_Internet]

This coming together of large media companies and cable companies over Internet video should put the anti-trust officers in Washington on red alert. They should be paying attention to not only these moves, but also the metered broadband efforts of cable companies. The cable industry and its large media partners form a cozy cabal, though on paper they dislike each other.

Cable operators need media companies’ channels to overcharge the working stiffs like you and me. Media companies need the cable operators to share subscription revenues to pay for their highly inefficient and archaic businesses.

“The majority of profits for the big entertainment companies is from cable programming,” Stephen Burke, president of Comcast, tells The New York Times. “That stream is so important to every entertainment company that everybody is looking at that and saying, if we are not careful we could start to harm that model.”

Here is the irony: If Comcast thinks it is keeping the status-quo go, Time Warner’s Bewkes thinks he is inventing the future. “We’re talking about taking the TV industry to a new era,” he tells the Times. When I read that, I LOL-ed. That is rich coming from a guy who runs a company that has proven to be the Internet equivalent of the village idiot. Anyway, here are some minor details about this system that is going to be TV’s future.

The first test of the new system, which will authenticate cable subscribers online and make available programs on the Web for no additional charge, will be announced Wednesday, between Comcast and Time Warner. The trial will involve about 5,000 Comcast subscribers, and television shows from the Time Warner networks TNT and TBS.

Comcast and others such as Viacom have been championing their own authentication systems. There is a massive battle brewing where content owners and cable operators will soon find themselves on opposing sides. Cable companies (and large media companies) are unwilling to come to terms with the fact that their brands don’t matter as much in this age of content atomization.

It is not clear if consumers are really willing to deal with these confusion authentication systems. When our sister site, NewTeeVee, asked its readers if they would pay $10 per month to Comcast, nearly 70 percent said, No!

The complete press release is here:

Time Warner Inc. (NYSE:TWX) announced today that it has partnered with Comcast Corporation (NASDAQ: CMCSA, CMCSK) to develop broad principles for the TV Everywhere model to guide the distribution of its television content online.  The agreement between the companies will make it possible for Comcast customers to access programming from Turner Broadcasting’s award-winning entertainment networks free online and on demand.  In addition, Comcast announced it will begin a national technical trial of its “On Demand Online” service in July carrying programming from Time Warner’s Turner networks TNT and TBS.

The companies endorsed a framework that would bring significantly more television content to customers online in a manner that is consumer-friendly, pro-competitive and non-exclusive.  To ensure rapid adoption and deployment of online television content across the industry, a set of principles for the TV Everywhere model was designed to be simple and attractive for any programmer and any video distributor to elect to adopt.

The companies agreed to the following principles:

  • Bring more TV content, more easily to more people across platforms.
  • Video subscribers can watch programming from their favorite TV networks online for no additional charge.
  • Video subscribers can access this content using any broadband connection.
  • Programmers should make their best and highest-rated programming available online.
  • Both networks and video distributors should provide high-quality, consumer-friendly sites for viewing broadband content with easy authentication.
  • A new process should be created to measure ratings for online viewing. The goal should be to extend the current viewer measurement system to include advertiser ratings for TV content viewed on all platforms.
  • TV Everywhere is open and non-exclusive; cable, satellite or telco video distributors can enter into similar agreements with other programmers.

Time Warner Chairman and Chief Executive Officer Jeff Bewkes said: “TV Everywhere is no longer just a concept, but a working model to deliver consumers more television content over broadband than ever before.  We consistently look to make our popular, branded content more accessible to consumers in order to grow our business.  This progressive approach to delivering television content online will enable the continued vibrancy and growth of distribution outlets, their content partners and advertising clients.”

Brian L. Roberts, Chairman and CEO of Comcast said, “Today’s announcement is all about giving our customers exponentially more free content, more choice and more HD programming online as well as on TV. We have been working for a year to bring more TV and movie content to our customers online and we are thrilled that Time Warner is joining us in our national technical trial. Ultimately, our goal is to make TV content available to our customers on all platforms.”

The innovative agreement for this national On Demand Online technical trial will deliver more TNT and TBS programming online, free of charge to Comcast video customers, than previously available.  Comcast customers in the trial will be able to access TNT’s award winning programming like The Closer and Saving Grace, as well as the TBS line-up including Tyler Perry’s Meet the Browns and My Boys. The shows will be initially accessible on Comcast.net, Fancast.com and will soon be available on TNT.tv and TBS.com.

The On Demand Online technical trial will involve premium long-form content with approximately 5,000 customers.  The trial period will be dedicated to testing the new authentication technology on a national basis that will enable secured access to the content. This national trial will give customers an opportunity to explore the service and provide feedback that will help to shape the service over time.  The initial trial is the first phase of a multi-phase rollout that will expand the amount of content, features and functionality of the service as subsequent iterations are implemented.

In the coming weeks, Comcast expects other programming networks to participate as the nationwide trial expands.  Time Warner expects to announce similar trials with other distributors.

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