Fox (s NWS) escalated its fight with Cablevision (s CV) over retrans fees earlier today by blocking Cablevision customers from accessing Fox content on Hulu as well as Fox.com, only to reinstate access a few hours later. The whole episode was clearly meant as a show of force — a warning shot, if you will. But this wasn’t just about getting a few extra bucks from Cablevision.
Fox had to know that blocking access to Hulu would raise more than a few eyebrows at the FCC, and cause public interest groups to ring the alarm bells about possible consequences of media concentration. Which is actually quite convenient when one of your biggest competitors is about to enter a huge merger.
Peter Kafka was spot on today when he noticed that blocking access to Hulu is not actually that big of a deal in the current retrans fight between Cablevision and Fox. The network’s biggest pressure point are the football games scheduled for this weekend, which aren’t accessible via Hulu or Fox.com. Hulu only features Fox shows, which hit the site the day after they broadcast, and are usually available for a few weeks at a time.
“That means Cablevision subs can’t see Sunday night’s episode of The Simpsons on Monday, but that’s not the same kind of impact,” wrote Kafka, and I have to agree, even though Glee fans would probably have been pretty upset about missing the next episode of their favorite show.
However, the bigger issue seems to be that Fox showed how much Hulu has to follow the lead of its corporate parents. We can be certain that the incident will have an impact on the ongoing legislative and regulatory review of the Comcast (s CMCSK) NBCU (s GE) merger. After all, it’s safe to assume that NBC has the same kind of power to block subscribers of a certain ISP from accessing Hulu — only, that power is even more questionable if you’re about to go down the aisle with the country’s biggest ISPs. What will stop Comcast (s CMCSA), regulators might ask, from arbitrarily stopping subscribers of competing broadband services from accessing NBC content on Hulu?
I’m not saying that this is something that Comcast is considering, but the mere fact that a blackout like this can be pulled off by one of Hulu’s corporate parents could be enough for some to question whether a merged Comcast NBCU should own any part of Hulu at all. Senator Herb Kohl (D-Wis.), who is chairing the Senate Judiciary Antitrust Subcommittee, already called for NBC to divest its 32 percent stake in Hulu earlier this year. It doesn’t take much to predict that this demand will get a lot more support in the coming days.
Sure, Fox would love to get a few extra millions from Cablevision. But News Corp. surely wouldn’t mind getting more control over a web video platform that could soon be valued a whopping $2 billion, either.
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