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2 cable giants hope to discourage free online TV

Time Warner teams with Comcast on a new venture that would make it harder for people to watch TV shows online for free.

June 24, 2009|Meg James

Call it the anti-Hulu.

Media giants Time Warner Inc. and Comcast Corp. are expected to announce this morning they are teaming up on a new venture that would make it harder for people to watch TV shows online for free.

Motivating the two companies is the emergence of online video as an alternative to TV. Hulu, the video website owned by News Corp., NBC Universal and soon, the Walt Disney Co., has become an overnight sensation with its plentiful supply of TV shows for free.

It's that free part of Hulu that is so worrisome to Comcast, Time Warner and other media companies.

Cable operators have been irritated that Hulu gives away programming that they pay good money to carry. Cable and satellite operators shell out some $22 billion annually in fees to carry cable channels, which explains why the growing popularity of Hulu makes them nervous.

Several companies, including Time Warner, which owns such networks as HBO, TNT and CNN and the Warner Bros. TV production studio in Burbank, are trying to preserve the current economic model that underwrites the high cost of producing shows.

Called "TV Everywhere," the initiative has been pushed hard by Time Warner Chief Executive Jeff Bewkes.

It requires viewers to demonstrate that they already subscribe to a pay television service -- cable, satellite or telephone company -- before they can watch certain shows on their computers.

But technology has been a hurdle in these efforts. The companies need to find a way to "authenticate" whether the person logging on to a website also is a paying cable or satellite subscriber.

Time Warner Cable has been testing the service in Wisconsin. Comcast plans to test its version, called "OnDemand Online."

Another Comcast service, Fancast, which provides episodes of TV shows, could become the vehicle for TV Everywhere. Both companies declined to comment.


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