TV Everywhere, Money Nowhere

5:25 PM -- I can't help but think cable operators need to worry about how TV Everywhere could affect their business models.

A panel yesterday at the Streaming Media West conference tried to address this issue, but didn't get far. (To be fair, two of the three panelists were last-minute replacements, one substituting for a Disney no-show.)

Moderator Colin Dixon, an analyst with The Diffusion Group , pointed out that cable's businesses and licensing relationships were built up in an environment of near-monopolies, which led to inflated licensing fees but also big ad dollars. As the world shifts to Internet viewing, the ad figures go downward, and Dixon couldn't spur the panelists to theorize how the operators can make that trend end happily for themselves.

The idea behind TV Everywhere is to put TV and movies onto Internet-connected devices, particularly PCs. In the early going, cable doesn't lose anything by doing this, because the service goes only to subscribers -- people already paying the MSO for their TV.

But it gets people acclimated to watching video on other devices. And as they start to notice that certain content doesn't go "Everywhere" (Disney is a noteworthy holdout), they'll be motivated to try other, Hulu-like ways of watching via the Internet -- exactly the problem cable is trying to avoid with TV Everywhere. (See TV Everywhere: The Path to All-IP Cable .)

I'm having trouble seeing how TV Everywhere doesn't end up emphasizing the operators' role as an increasingly irrelevant middleman. I'm also not convinced it's not a money loser. And yet, MSOs feel they have to do it. Comcast Corp. (Nasdaq: CMCSA, CMCSK) is convinced enough to try a nationwide launch next month.

The common guess -- which I agree with -- is that cable will eventually charge for TV Everywhere. It's certainly what Disney wants. I don't see that working out, though. People think they pay too much for TV as it is, and TV Everywhere isn't worth a Ticketmaster-like convenience charge.

Maybe cable can find new money in a dumb-pipe way. At the end of the session, panelist Hervé Utheza, president of software company Related Content Database Inc. (RCDb), predicted Comcast will buy a wireless operator in two to three years. That would mimic what Verizon Communications Inc. (NYSE: VZ) hopes to do with its own TV Everywhere effort. A TV signal carried over Comcast's broadband, through a home base station, into a mobile device billed to Comcast -- maybe that's where cable makes money from online viewing.

— Craig Matsumoto, West Coast Editor, Light Reading