Update: this story got much less confusing for me once they changed the title from "TV Industry Starts to Regret Free Online Viewing" to "Some Online Shows Could Go Subscription-Only". Though the SEO headline (what Google and other search engines see as the story's title) is now "Cable Industry Starts to Regret Putting Free Shows Online" -- also not as confusing!)
I rolled my eyes in many spots when I read this story:
It starts off messy from the get go, with the headline TV industry starts to regret free online viewing - as if there haven't been people at the networks outspokenly regretting this for years already! That's nothing new. But then it immediately jumps to talking about a test where Time Warner is providing (paying) HBO customers with HBO content online, but if you don't already have (pay for) HBO, you can't access it. That's not a free service to anyone except those who are paying for it! And HBO content is not available for free via services like Hulu. Then there's this:
Leading the charge are the cable and satellite companies, who worry that the proliferation of free video on the Web - and downloadable shows on Apple's iTunes - may be harming the $60-billion-a-year subscription video business by allowing people to unplug their cable services.
AT&T, Comcast, DirecTV, Time Warner Cable and Verizon are among the companies exploring a subscribers-only approach to online TV, according to television executives with knowledge of the talks. The distributors have approached cable channel companies like Viacom, owner of MTV, VH1 and Comedy Central; Scripps Networks, owner of HGTV and the Food Network; the BBC; and Discovery to talk about giving subscribers online access to their shows. The Wall Street Journal first reported on some of those talks last month.
I don't believe the cable and phone companies are too worried about iTunes, you're not likely to download a 42 minute program that's ~650MB unless you have some sort of broadband, and the cable companies are among the biggest broadband access providers. In fact, between Comcast, AT&T, Time Warner Cable and Verizon, you might have the lion's share of all broadband providers. Plus, while there are many clips available online for the above mentioned shows and networks, many of the actual shows are not available online for free (outside of torrent downloads) though more and more shows are popping up online (you can get full episodes of The Real World, and Real Housewives, for example, online).
I can see why MTV might be regretting this -- it's because fewer people are watching The Real World on TV than ever and they know how to make money on TV viewers and like everyone else, are still figuring out how to make money online. And MTV can't be alone as there are some cable shows that are widely available for free online (Damages, Battlestar Galacica, and TNT and other cable networks that do make their shows available online) and again, I can see the cable networks lamenting that somewhat, especially in the case of say Damages, which isn't actually getting watched very much on television.
I question this paragraph completely:
One company getting squeezed by these pressures is Boxee, a New York start-up whose software for PCs can be used to bring shows from Web sites like Hulu to the television set. Last month, Hulu's backers, Fox and NBC, pressured Hulu to remove its content from the Boxee service because it threatened their efforts to get the cable operators to pay them what the industry calls retransmission fees.
Pressured Hulu? Pressure is, "We'd really appreciate it if you turned it off..." That didn't happen. Hulu was instructed explicitly to turn it off. That's not pressure, that's a command from the owners that was heeded. I don't buy that cable retransmission fees were an issue at all. I think it's more the issue of what Boxee CEO Avner Ronen had to say:
"Transitioning online opens up great opportunities for networks, but it also runs the risk of cannibalizing their existing business," said Avner Ronen, Boxee's founder. "Right now I think they want to tread the online waters carefully, to experiment online while it's still a small business, and to innovate there, but not to rock the boat too hard at the risk of tipping it over. That's the conflict they have."
That struck me is the truest part of the article and speaks to why Hulu was really told to yank Boxee access. The networks have no problem toying around with online video - as long as you're looking at in on a computer screen. When someone makes it easy to put that free online content on your television, that's rocking the boat too hard.
But as I've written elsewhere, in the attempts to shut off Boxee, the networks (NBC/FOX) and Hulu are just giving Ronen and Boxee tons of free marketing. It's the best thing that could've happened for Boxee and Ronen. Ignoring them and letting them do whatever they want for now wouldn't be nearly as good for Boxee!