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ABC Makes TV Less Free

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In another move to restrict online access to broadcast TV, ABC Inc. will soon force viewers to sign in with their pay-TV credentials in order to stream on-demand content during the first week after a show airs on television.

The network posted information on the policy change on its Watch ABC website, along with a list of pay-TV providers participating as partners. Most of the major cable and telecom TV operators are on that list, but Time Warner Cable Inc. (NYSE: TWC) is a notable exception. DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH) are missing in action as well.

ABC started down the paywall path last spring when it launched the Watch ABC app. The app makes live streams of ABC shows available on the Web, but only to authenticated pay-TV subscribers. (See ABC Joins Live TV Streaming Parade.)

The latest news from the network extends the authentication requirement to early on-demand viewing as well. ABC notes that users without a pay-TV subscription will still be able to access new content with a Hulu Plus account or by purchasing new episodes through iTunes or Amazon Instant Video. The new policy goes into effect on January 6.

The idea of making network TV free online has come under assault in recent years as broadcast programmers have grown to rely more heavily on licensing fees to supplement advertising revenue. (See 'Free' TV Model Under Threat.)

News Corp. (NYSE: NWS), which jointly owns Hulu LLC with both Walt Disney Co. (NYSE: DIS) (parent company to ABC) and Comcast Corp. (Nasdaq: CMCSA, CMCSK), started locking up its online programming for the first eight days after broadcast back in 2011. As the trend continues into 2014, it will make the legal battles over Aereo Inc. even more interesting to watch. The more broadcasters restrict online access to TV shows, the more valuable Aereo's service has the potential to become. (See Aereo Fight Heats Up in DC.)

— Mari Silbey, Special to Light Reading

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Carol Wilson 1/2/2014 | 11:08:57 AM
How else can they continue to charge such high content fees? This makes total sense from ABC's perspective. They can hardly justify charging cable, telco and satellite companies high retrans fees if they are giving everything away online. 

I still think a lot of cord-cutters won't mind waiting a week. Those of us retrained by our DVRs to watch our favorite shows when we feel like it, and not on a schedule, don't view a week's delay as any big deal. 
Phil_Britt 1/2/2014 | 11:56:50 AM
Re: How else can they continue to charge such high content fees? I agree. Once Fox and others showed that it worked for them -- they would have abandoned the model by now otherwise -- it was only a matter of time before others followed suit. 

This will kill my wife if DVR fails and she has to wait a week for soap opera. :)
KBode 1/2/2014 | 11:58:28 AM
Re: How else can they continue to charge such high content fees? It makes sense up to a point, though ABC executives forget that in some ways they're competing with piracy. Customers annoyed by a longer wait time (or by the fact their ISP may have not yet made a deal with ABC to make this content available) may very well just pirate the content where previously they would not. 

Granted many pirates pirate content no matter what, but why give them the added incentive? I'm not entirely sure more walls and greater restrictions are quite the cord cutting preventative executives continue to believe they are.
Carol Wilson 1/2/2014 | 12:06:54 PM
Re: How else can they continue to charge such high content fees? I don't think this necessarily prevents cord-cutting - most of that is economically based and is going to happen whether or not there are week-long delays to viewing programming. I just think it's become part of the negotiations around retrans rights - it's my understanding those aren't going down. How can a network like ABC justify high fees for retrans if they are giving away the same content a day later for free on the Internet?
DOShea 1/2/2014 | 3:59:50 PM
Re: How else can they continue to charge such high content fees? If it's key to realizing premium value for their content, I'm surprised this didn't happen earlier. I wonder if this is something broadcasters are actually learning from the process of retrans negotiations. Maybe their cable TV operator partners pointed it out, and now they are plugging the hole in the (pay)wall.
MordyK 1/2/2014 | 4:35:27 PM
Aereo Do broadcasters really want to be the one's convincing users to sign up for Aereo? I just don't get them!
brookseven 1/2/2014 | 5:44:02 PM
Re: Aereo ABC gets paid either way either by the cable cos or by advertisers for OTA.

So why would they care?

seven
Carol Wilson 1/2/2014 | 5:48:39 PM
Re: Aereo I think that given the continued upward spiral of retrans fees, ABC and other networks do care. I've thought for some time that it makes little sense for cable and telco video providers to be paying through the nose for content that is all too easily available online. It seems to me that if they are going to continue to get those big bucks from pay-TV providers, they have to make it a little harder to get the same experience online. 
brookseven 1/2/2014 | 6:06:48 PM
Re: Aereo Carol,

 

Does ABC pay the retrans fee or the local affiliate?

 

seven

 
Carol Wilson 1/2/2014 | 6:31:00 PM
Re: Aereo The payTV companies - cable and telco - pay ABC and its affiliates to retransmit their content. The negotiations around these retrans deals have become contentious in recent years and the cost of retrans fees has actually driven some smaller IPTV providers out of the video business altogether. 
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