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Killing the golden pay-TV goose

It’s been pretty clear for a while now that the TV networks are not keen to help a nationwide, over-the-top linear pay TV service get off the ground, rebuffing efforts by the likes of Apple and Google to license the needed rights and suing Aereo for trying it without the rights. Now, Intel seems ready to throw in the towel, too.

After failing in its initial efforts to secure the rights it needed for its ambitious OnCue initiative, Intel tried offering to pay premium prices to media companies, but to no avail. With costs rising it started casting about for a partner, then announced a delay, and now, according to reports, it’s looking to unload the whole thing to Verizon.

Even if Verizon were to acquire OnCue’s assets, however, there’s no guarantee it would have any more success than Intel, Apple or Google at securing the rights to offer an OTT service outside its current FiOS footprint.

The reason is plain enough: the networks prefer to divide and conquer. They would rather continue selling rights to pay-TV providers on a market-by-market basis, as they do now, where they have most of the leverage, than risk facing a buyer with national market share. You have to wonder, though, if it isn’t time for them to start thinking about giving linear OTT a little oxygen.

We’re seeing again, as third-quarter earnings get released, that major cable MSOs continue to lose video subscribers. In some cases, the network’s own demands contributed to the losses. Time Warner Cable lost 306,000 video subscribers in the quarter, due at least in part to the CBS blackout in August.

For now, the higher carriage and retransmission fees the networks are winning from MSOs is masking any impact from the loss of subscribers. But at some point, even a golden goose has to eat.