NBC will stream its linear broadcast network live online, but only for pay-TV subscribers.
According to The Wall Street Journal, NBC Universal has decided that it will offer multiscreen video access to live content for authenticated subscribers of a paid television service. Although the same content is available for free over the air, consumers will have to pay for it online as part of the pay-TV bundle. NBC has not responded to our enquiries abut the reported service yet.
This is similar to the business model for traditional cable, telecom and satellite TV offerings. Service providers pay licensing fees to broadcasters for the right to include network programming in their pay-TV packages. Those costs are then passed on to customers through monthly subscription fees.
The move by NBC follows a similar path that ABC Inc. carved out more than a year and a half ago with the launch of Watch ABC. The Watch ABC service also streams live content online, but only for authenticated pay-TV subscribers.
In contrast, CBS Corp. (NYSE: CBS) launched a paid over-the-top service called CBS All Access earlier this fall. CBS All Access is available to all consumers, but comes with a $5.99 monthly fee. The CBS service includes live local streaming in select media markets, along with next-day streaming of some popular shows and on-demand access to a large back catalog of content. (See CBS Takes OTT Plunge.)
By bundling access to network content online, both ABC and NBC are attempting to shift the existing cable model for TV delivery to the web. That doesn't sit well with some in the industry. A number of smaller service providers say they'd welcome the opportunity to sell broadband-only subscriptions and allow consumers to pick and choose the content they want to buy online.
At the American Cable Association (ACA) 's Summit in Washington, D.C. last April, Wave Broadband CEO Steve Weed went so far as to declare, "I want to be a dumb pipe with a lot of good service." (See Is Dumb Pipe the Smart Move?)
US Representatives Anna Eshoo and Peter Welch at the ACA event put it another way. They talked about their concern that there will be a "cable-ization of the Internet." In other words, they fear that if broadcasters extend the current pay-TV model to the web, consumers could end up paying for an Internet subscription that comes bundled with a basic tier of content. (See Rep. Rips Retrans 'Racket' .)
— Mari Silbey, special to Light Reading