Two major providers of pay-TV in USA, namely, Verizon Communications, Inc., and Time Warner Cable Inc have planned to test their systems designed to offer television shows on the web to paid subscribers. This is being seen as a move to protect their revenue earned from subscriptions. The two organizations announced their plans separately on Thursday, and are going to follow Comcast Corp, which is the largest cable operator in United States. Comcast announced back in July that it was going to test out a Web TV service with a selected group of customers.
Pay-TV companies have expressed concern that the subscription revenue of cable TV, which has not taken much hit even during the ongoing economic recession, could take a serious hit if cable TV shows could be viewed by just about anyone on the web. As an alternative, the cable network industry, under the leadership of Jeffrey Bewkes, Chief Executive of Time Warner, has begun testing out a new concept known as TV Everywhere. It will provide a way to paying customers to access cable shows over the internet through an authentication procedure. The initial trial, according to Time Warner Cable, will include the channels Syfy (owned by NBC Universal), TNT (owned by Time Warner), AMC (of Cablevision Systems Corp.), IFC and Sundance Channel, and finally, BBC America (of BBC). The trial will also involve Discovery Communications Inc and CBS Corp.
The test will be based on providing cable TV shows via the Web to 5,000 paying customers. They will be able to view the shows on Time Warner’s Web properties, and also access the shows on the websites of the network. Verizon will launch a test round of its TV Everywhere of its FiOS TV on the web with programming from Turner Networks (under Time Warner), TBS, and TNT. The service will be available to FiOS subscribers at no extra cost.
DirecTV Group Inc, the largest provider of satellite TV services in United States, is also reportedly working on a plan similar to TV Everywhere.
Major free-to-air broadcast networks are dependent on advertising, not subscription packages, for their revenue. As such, these networks have made their shows freely available on the internet, with a healthy dosage of advertisements accompanying every show. The big names include Hulu (owned by News Corp.), Walt Disney Co, and NBC Universal. Their shows aired over the Web are free for everyone and include popular names like “The Office” or “House.” In some cases, some shows are even downloadable by viewers for free.