Media Money with Julia Boorstin

Time Warner And Comcast Partner To Save Cable


Time Warner, one of the biggest creators of cable content, and Comcast, the nation's largest cable broadcaster, have teamed up to help the industry compete in an Internet-dominated world.

They're working on a model TWX's CEO Jeff Bewkes has dubbed "TV Everywhere." Comcast will roll out a national test of "On Demand Online" in July, giving 5,000 subscribers access to programming from Turner's TNT and TBS. The idea is to give cable subscribers access to cable TV content online, through a secured website. It would be an added value for subscribers, and it's intended to ensure that the content isn't available elsewhere.

The cable business faces a major threat from the Internet as people watch more content online, for free. This challenges both cable operators like Comcast and Time Warner Cable and cable programmers like Time Warner and Viacom: revenue from cable subscriptions has remained incredibly robust, despite the recession, and cable advertising is one of the strongest ad sectors. Cable programmers spend about $22 billion on programming and cable is still the most important of the three services cable operators offer. So it's definitely an industry worth defending.

The industry has been wary of any meetings that could be perceived as collusion -- the last thing these companies need is an anti-trust investigation. But at the same time the whole industry will have to participate to really make this a new business model. So Time Warner and Comcast are using this partnership as an opportunity to lay out the framework, emphasizing that "it would bring significantly more television content to customers online in a manner that is consumer-friendly, pro-competitive and non-exclusive."

Time Warner says that other content creators are expected to get on board to share their shows through Comcast. And other cable broadcasters like Time Warner Cable are expected to announce their own tests soon. Meanwhile everyone will be watching to see whether "On Demand Online" works. Will people watch? And will they watch the ads? And will the technology be secure?

Questions?  Comments?