The rise of many new pay TV providers in recent years and the emergence of the subscription-based online TV model TV Everywhere has not done nearly as much for the profile of pay TV as the current speculation that Comcast may be eyeing acquisition of a majority stake in content powerhouse NBC Universal.
Suddenly, the world is becoming aware of two things: 1) The end of free TV is a matter of when, not if, and 2) Content is the key game-piece in the chess match between traditional cable TV giants and all their challengers.
Some observers are wondering what will happen if Comcast gets its hands on the TV and movie firm that owns a big piece of free online TV maven Hulu. What will happen is the same thing that was already going to happen: Most cable channels will rapidly move to the pay model of TV Everywhere, and free online TV players like Hulu will have to start charging as well, or start packing up their offices. It's possible Comcast could shut down Hulu if it gets control of NBC Universal, though I wonder if they would rather keep it alive and just force its conversion to the pay model. Online video has some momentum, and that's why cable is trying to apply its own rules to the evolution.
The future of TV is pay TV, just as the future of broadband Internet is usage-based. Some TV traditionalists may just be noticing this as a possible development, but the cable TV players helped invent the notion a while ago, and now they are seeing how they can apply it to the newest TV distribution model, the Internet.
One question to ask if the Comcast-NBC Universal deal happens is: What content house or channel properties will next be the target of acquisition by Comcast or one of its cable TV brethren? The cable TV industry recently has seen its regulations loosened in a way that suggests more freedoms to come, and it's not far-fetched to guess that they will now pursue more strategies that can help them strengthen their pay TV dominance and block their competitors. That's a page from the telcos' own monopoly handbook. (Interestingly, Time Warner went the opposite route in separating from Time Warner Cable, but guess who is leading the TV Everywhere charge that will put TW content under lock-and-key with cable TV subscriptions?)
While the ultimate value of content control still may be questionable, it seems like a great initial step for market share leaders to take against their challengers by forcing them to pay more to access the content they need as basic table stakes to support their services. The traditional networks like NBC may no longer seem as valuable in that sense as they once were, but the broader array of channels that NBC Universal is responsible for would give Comcast some pretty good pricing leverage, wouldn't it?
I suppose that telco TV players do not yet have a big enough presence on the TV landscape to make a play for control of NBC Universal--now, that would make things really interesting. Can you imagine Verizon Communications and Comcast wrestling over the Peacock Network? But, again, if Comcast closes the NBC deal, which it last week denied was already in place, one benefit will be its potential ability to cripple the progress of telco TV, and lessen the likelihood that such a wrestling match would ever happen. -Dan