Cable companies sure know how to make life tough for the competition. According to Bloomberg, Time Warner Cable Inc. and other pay-TV operators are now offering cash incentives to programmers to keep content out of the hands of their Web-TV rivals.
In some cases, cable companies are reportedly writing bigger checks to lock up video assets. In other cases, they're threatening to drop programming if content owners don't agree to withhold distribution from companies like Apple Inc. and Intel Corp.
Deals for content exclusivity are nothing new in the pay-TV business. Take the DirecTV Group Inc.'s long-standing deal for the exclusive rights to NFL Sunday Ticket. As Time Warner spokesperson Maureen Huff puts it, "exclusivities and windows are extremely common in the entertainment industry." (See DirecTV Might Sack Its NFL Exclusive.)
However, there are concerns that cable companies are amassing too much power. Most over-the-top (OTT) video providers have made little headway in the traditional pay-TV market, largely because of content licensing issues. Netflix Inc. has been successful, but only with an offering based primarily on back-catalog content and select original programming.
Microsoft Corp. abandoned plans to mount its own pay-TV service in 2012, due to high licensing costs. Likewise, Intel appears to be having a difficult time signing up programmers for its quest to launch a subscription service this year. (See Microsoft Puts Pay-TV Plan on Pause)
Meanwhile, just because cable companies don't want competition from OTT providers doesn't mean they don't want to send their own content over the top. Time Warner Cable, for example, already has apps for subscribers who want to view cable content on Roku Inc. set-top boxes and Samsung Corp. smart TVs. (See TW Cable App Debuts on Roku.)
Cable operators are quite happy with the TV Everywhere concept, as long as it's on cable's terms.
— Mari Silbey, Special to Light Reading Cable