March 31, 2009

Cable Companies, Networks To Discuss Online Programming

U.S. cable operators and networks will seek to preserve and enhance a long-term partnership now under threat as more and more consumers choose to watch their favorite shows online, Reuters reported.

They are set to meet at their biggest annual industry event this week to discuss the future of their long-running partnership.

For years, cable companies have partnered with the National Cable Telecommunications Association Show to promote faster broadband speeds, advanced digital phone services and new wireless services.

The companies will be meeting to determine how they can benefit from disintermediation, as consumers can now watch decent-quality video online whenever they want, and often for free.

Tuna Amobi, equity analyst at Standard & Poor's, said cable companies were in a more protectionist mode last year, but now they're facing up to the inevitable trend of online video.

The current state of the economy will also be a subject of concern for executives at the meeting.

Collins Stewart analyst Thomas Eagan said the recession has cut into consumer spending for household TV and telecommunications, while also causing most marketers to reduce their advertising budgets.

The industry hopes to forge new tie-ups to capitalize on the online trend in the long term.

Most of the major cable companies are currently working on plans to offer shows on-demand over the Web for already paying subscribers.

Later this week, Time Warner is releasing details of a new Web programming initiative called "TV Everywhere" with HBO and its former sister company Time Warner Cable.

Time Warner Chief Executive Jeff Bewkes said in an internal memo sent companywide on Monday: "Not only will the TV Everywhere initiative offer consumers more for their money, but it'll also enable television networks and multichannel video services to extend the current business model by delivering more high-quality television content online."

However, the cable industry's increasing broadband speeds have boosted sites like Google Inc's YouTube and News Corp and NBC Universal's Hulu.com.

Comcast Corp is currently preparing a service called On Demand Online, to be an extension of its existing video on demand service.

It expects to roll out even faster speeds on its new cable platform, first demonstrated at last year's show.

Mitch Bowling, Comcast's senior vice president of online services, said On Demand Online really makes a difference in the quality of the video when watching a show in an HD show.

"It decreases the buffer time and if you're downloading the video, it's a much faster experience," he said.


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