TV Everywhere, the subscription-based online TV brainchild of broadcast giant Time Warner, is set to launch on a trial basis to 5,000 Comcast cable TV customers starting in July. TV Everywhere, in the short space of less than two months, has suddenly become a budding cable TV industry standard for online TV and will kick off in partnership with the market-leading cable TV service provider. The concept also has drawn much criticism already from groups who see it as media conglomerates masquerading as an egalitarian-sounding venture. No doubt it will draw more as the trial proceeds.
Meanwhile, telco TV providers plan to sit on the sidelines to watch what happens. They don't really have an answer to TV Everywhere, though if the concept succeeds for cable TV, we should probably assume telcos eventually will be on the list of potential TV Everywhere subscription partners. Because their subscriber bases are still very small compared to the cable TV companies and satellite TV firms (though they are partners with the latter group), they are not the logical early partners for a broadcast giant like Time Warner.
Being at least third in the pecking order--some might say fourth after the Internet as a distribution medium--is something telcos are used to, and though they have fought for a better seat at the broadcast industry's dinner table, that has yet to happen. When I first heard about TV Everywhere, I was concerned about the possibility of telcos being left out of the concept, but upon further review, I've decided that's just fine, because the future of the TV distribution business model and the role of advertising and subscriptions is still being sorted out.
News of the trial comes as Screen Digest reported that online TV ad revenues continue to rise, but are not increasing at a fast enough rate to off-set the ongoing decline in broadcast TV ad revenue. That's bad news in particular for telco TV providers, who have been hoping to grow their share of broadcast TV ad revenue. The broadcast and cable TV giants may see the writing on the wall regarding broadcast ad revenue, and are trying to avoid a fate similar to that suffered by the newspaper industry, which could not adapt quickly enough to the lower-revenue, lower-overhead, slimmer-profit margin economic model of Internet distribution.
The answer for broadcasters and their cable TV partners is the extension of cable TV subscription walled gardens onto the Internet, but that has raised anti-trust concerns, and may yet prove to be a business and operational debacle. The telcos need to see whether this effort succeeds or fails before they can decide whether to continue trying to ingratiate themselves to broadcasters, or spend more time exploring alternatives to the traditional subscription TV model. The good news for telcos is that they can still move in either direction without worrying about marring their TV legacies. For once, it's kind of nice not to have much of a legacy, isn't it?
TV Everywhere is all about control
Telcos have remained TV market outsiders
TV Everywhere got a leader last month