Cable companies have watched online video upstarts like Hulu and YouTube take attention away from their most important business — cable TV services — with little response so far.
But in a new effort to keep cable TV subscribers from fleeing — and potentially add new subscribers — they are now trying to move deeper into Web video, the Wall Street Journal reports.
WSJ: Top cable-television providers and TV networks are exploring a sweeping solution to the threat of online video: putting large numbers of cable shows online, but accessible only to cable subscribers.
Comcast Corp. and Time Warner Cable Inc. are discussing with owners of major cable-TV networks ways to give cable subscribers online access to much of the networks’ programming, according to people familiar with the situation.
The discussions, according to these people, have been continuing in recent months and include network owners Viacom Inc., Time Warner Inc. and General Electric Co.’s NBC Universal, among others. These companies own such prominent networks as USA, TNT and MTV.
What’s the point? By offering access to more online video content than Hulu can offer, Comcast might convince people to continue spending money on cable TV service.
Comcast and Time Warner could also give consumers other incentives to watch their online video services instead of rivals’ — by taking advantage of the fact that they own and operate their own broadband pipes.
For instance, they could hypothetically open up more bandwidth for their Web video streams, even if you pay for a lower-bandwidth cable Internet service. That might mean you could watch HD online video from Comcast, whereas you might only be able to watch lower quality video from Hulu.
Or the cable operators might (again, hypothetically) exclude their own (and their partners’) Web video services from bandwidth caps and overage charges, while capping (and charging extra) for video from Hulu, Netflix (NFLX), or Apple’s (AAPL) iTunes.
Why might the cable networks offer Comcast content for its Web video service that they wouldn’t offer Hulu? Because Comcast and other cable companies pay cable networks like USA vast amounts of revenue — cable subscriber fees — that won’t soon (if ever) be replaced by Web ad revenue.
Update: A Comcast rep responds in comments below. She says that the product — tentatively called “OnDemand Online” — would count against Comcast’s (relatively generous) 250 GB bandwidth cap just like all other Web video. That’s interesting to note, but Comcast is just one provider; other cable providers might not be so generous.