Time Warner Cable pays media companies to keep shows off the Web
Many industries have transitioned into our present Internet-driven world of 24/7 connectedness, but cable TV is one that still lags behind. While the technology is making strides toward reaching its potential, the business side of things isn’t making a whole lot of progress thanks to cable providers. Bloomberg published a report today stating that one provider, Time Warner Cable, has been paying media companies to keep their TV shows off of the Web — an attempt to make cable TV more attractive and remove options for those who want to cut the cord.
And if money doesn’t work, Time Warner Cable reportedly threatens to drop a company’s channels from its lineup. It’s yet another illustration of how twisted the relationships are between media companies and cable TV providers, and just how far cable providers are willing to go to protect their business.
It shouldn’t come as a surprise. Cable companies have long been suspicious of any attempts to change the cable TV status quo — after all, these services are cash cows, forcing customers to pay over $100 or month for dozens of channels they might never even watch. And these providers have been particularly resistant to suggestions of a la carte models that might save customers money but could cause a decrease in revenue.
Online pay TV services like iTunes, Google Play, Amazon and others offer some shows the day after airing, pricing episodes around $2 or $3 each. While you can’t watch the episodes live, you can buy them individually. This comes pretty close to a la carte programming, so it’s no wonder that a company like Time Warner would try to offer incentives to media companies in order to keep those shows on cable exclusively.
It’s worth noting that, as part of its NBC Universal acquisition, Comcast had to agree not to strike these kinds of deals with media companies. But that doesn’t mean other providers aren’t doing it.
Are these kinds of agreements fair, both to customers and to Web TV providers? Rich Greenfield of BTIT doesn’t think they are. Referring to a contract clause that might prevent companies from putting TV shows online, Greenfield said, “Whether or not this restrictive MVPD contract clause is illegal, it most certainly is bad for consumers, as it limits competition and prevents the emergence of distributors who can provide revolutionary new ways of experiencing live linear and on-demand TV without being encumbered by legacy infrastructure.” He also wrote that such agreements could potentially fall on the wrong side of anti-trust law.
Regardless of whether or not Time Warner Cable’s agreements are on the right side of the law, they’re harming consumers by taking away choice. They’re also stifling innovation, holding the television industry back from developing next-generation delivery methods. Time Warner Cable is essentially paying to keep its customers in the past as it tries to delay the inevitable. Here’s to hoping that someone steps in and puts an end to this practice.
We’d love to get your thoughts on this topic. Do you think TWC’s deals with media companies are fair or not? Drop us a line below.