Story from the Wall Street Journal
Several major cable networks and subscription-TV providers are readying systems that will let only paying subscribers watch cable shows on the Web, part of an effort to counter the growing amount of free TV shows available online.Comcast Corp., Time Warner Cable Inc. and DirecTV Group Inc. plan trials of subscriber-only online services this summer, according to people familiar with the matter.
Comcast's test, which it announced Wednesday, will cover 5,000 homes and feature programming from Time Warner Inc.'s TNT and TBS networks, including TNT's "The Closer" and TBS's "My Boys."
Networks such as A&E and the History Channel, which areowned by a venture of Walt Disney Co., Hearst Inc. and General Electric Co.'s NBC Universal, along with networks owned by Scripps Networks Interactive Inc. and Cablevision Systems Corp.'s Rainbow Media are also slated to participate in Comcast's test, according to executives. NBC Universal said it is also in talks to participate in Time Warner Cable's test.
While limited, the new tests represent part of an industry-wide push to preserve and possibly expand the cable-TV business's lucrative subscription model in a digital world. The move also come as media companies are struggling to make money from online video.
A large amount of TV content has already made its way online—particularly from broadcast networks that depend largely on ad revenue. In addition to putting shows on their own Web sites, NBC Universal and News Corp., owner of Fox Broadcasting (as well as The Wall Street Journal) formed Hulu, an ad-supported Web site that aggregates TV programming. Disney's ABC recently signed on, and CBS Corp. has its own video site, TV.com.
Cable operators have chafed as cable networks have posted some of their programming online. The new systems would allow networks to put more programming online without enticing viewers to cancel cable-TV subscriptions.
"The vision is you can watch your favorite network's programming on any screen," said Time Warner Chief Executive Jeff Bewkes, one of the plan's most ardent proponents, at a press conference Wednesday. He added that the plan is "not defensive."
Mr. Bewkes said in interview he is in talks with other providers, including DirecTV, Dish Network Corp., Verizon Communications Inc. and AT&T Inc., and expects to announce more deals in "days or weeks."
A DirecTV spokesman said it will launch a trial this summer. Terry Denson, Verizon's vice president of content and programming, said the company is close to an agreement with Time Warner and other content providers about a similar test. Representatives of AT&T and Dish declined to comment.
There are still significant technical and business hurdles to launching such a system. Some cable-network executives say they believe that cable operators should pay extra for putting more programming online.
Both Time Warner and Comcast said Wednesday that the system they are pursuing will be interoperable with other companies' systems to authenticate subscribers.
There's also a question of whether some media companies will want to sequester their most popular content behind a subscription wall. "People are afraid to go first," said Mr. Bewkes. "We aren't."
