The Problem With TV Everywhere: There’s No Business Model

Some cable providers and networks have been busy creating so-called TV Everywhere services that let subscribers log in and view on-demand video content online. But despite some early enthusiasm from select networks, these services have been slow to catch on. One reason for that, according to some cable and network execs, is that there’s no real business model for distributing content online through an authenticated service.

Comcast (s CMCSA) and Time Warner (s TWX) led the charge for TV Everywhere services beginning last year, announcing a partnership that would make additional cable content available to consumers who verify that they pay for a cable subscription. Since then, pay TV providers like Time Warner Cable, Verizon, AT&T, and Dish Network have made plans and rolled out their own TV Everywhere services.

But one thing that’s been missing from these services is real compelling content. Much of the early authenticated content that appears on TV Everywhere sites like Comcast’s Fancast Xfinity TV or comes from Time Warner properties like TBS, TNT and HBO. Even for those networks, only a limited amount of video is available to subscribers who log in. But outside of Time Warner, few programmers have made the investment to bring their cable content online behind a pay wall.

One reason that other networks have been slow to introduce TV Everywhere offerings of their own is that there’s no financial incentive to do so. Multichannel News reports that Bruce Eisen, Dish Network’s vice president of online content development and strategy, said that programmers don’t have a clear revenue path when rolling out TV Everywhere services.

“I’ve found most of the networks aren’t jumping into this with two feet. For good reason — there’s no business model,” Eisen said.

Discovery (s DISCA) is one company that has held back from widely making its content available through TV Everywhere services. According to a separate report in Multichannel News, Discovery CEO David Zaslav said at a conference last week that the programmer was not opposed to rolling out its own TV Everywhere initiative, but that any such project has to make money.

“We have been very careful about not putting our content out onto other platforms when the economic model doesn’t support it. TV Everywhere is actually something we are very encouraged by. If we can get our content through TV Everywhere authorized out onto the Web, and Nielsen can measure it or someone can measure it so we can monetize it, it would be very attractive,” Zaslav said.

I’ve been pretty pessimistic about the future of TV Everywhere ever since I got my first taste of what an authenticated cable service is like late last year. At least in its first iteration, TV Everywhere services have been difficult to use and so far lack really compelling content. But there are deeper, more fundamental issues, as I wrote about a few weeks ago:

“[S]o-called TV Everywhere services miss the point: the existing audience paying $100 a month for TV doesn’t care about watching True Blood on a laptop. The people watching True Blood on a laptop aren’t going to shell out $100 for a cable subscription.”

For a programmer like Discovery to make money off a TV Everywhere service, it will have to find an audience for that service. It’s a chicken-and-egg problem, for sure — how to attract an audience without content and why to put up content without an audience — and one that TV Everywhere proponents will have a difficult time answering in the short term.

Photo courtesy of Flickr user skpy.

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