Cable Tv Cannot Compete with Internet Tv. So Its Joining It Instead

With the huge popularity and prolifiration of Internet TV. The cable television industry has found a reposte to this increasing threat to revenue. Allow cable subscribers to watch cable on any internet enabled device.

Cable television giants, Time Warner and Comcast declared in June that they will launch a new service known as 'TV Everywhere'. Trials have already begun allowing subscribers to view on demand TV content from any internet enabled device from laptops to computers to mobile phones. This service is available for no extra cost of course, but then would the poor subscribers want to pay any more?. The plan has had a bright start with the announcement that CBS, HBO, Cinemax and Starz want to participate in the new scheme.

tveverywhereBusiness and public policy professor at Wharton, Gerald Faulhaber said:-"It's a sensible defensive move and it's not the last by any means. The cable guys are very aware of the threat of Internet TV which is very disruptive and attacks the model of cable television."

US viewers have watched over 6.8 billion videos via the internet during April, according to comScore. Over 40% of those views happened on YouTube, which dominates the online video market. No other online video websites achieved more than 3.1% of viewers. Bernstein Research, in a March consumer survey, found that 35% of respondents would consider cutting a cable subscription in favor of online video in the next five years. Cost and more content choices were the two top reasons for that decision.

According to Time Warner and Comcast, TV Everywhere adheres to a few basic principles: Make content easily accessible on the web, and make its use easy to measure. The effort will start this month with a 5,000 subscriber trial by Comcast. On a conference call, Time Warner CEO Jeffrey Bewkes said he expects other content providers and distributors to follow the TV Everywhere model. If it is widely adopted, he said, TV Everywhere could be the "biggest story in Internet video" and more successful than YouTube and Hulu. Comcast CEO Brian Roberts stated on a conference call that the TV Everywhere plan was "the next logical evolution of cable." He added: "Our view is to offer consumers whatever they might want on whatever device they want and when they want it."

The reaction was swift. Activist groups such as Public Knowledge and the Media Access Project panned TV Everywhere as a way to preserve an entrenched cable business model that limits consumer choices. Experts at Wharton, however, questioned those concerns. "I don't understand the backlash," says Peter S. Fader, a marketing professor at Wharton. "It's a wonderful idea and, if [the cable industry] gets it right, it will be huge. However, the chances of cable getting it right and becoming dominant are slim. There are so many interesting possibilities -- the chances for any one firm to come out and dominate are negligible."

Already, there are multiple players and business models in the Internet video market. Hulu is an advertising supported service offering professionally produced content. YouTube, whose subscribers upload 20 hours of video every minute, features all that amateur video as well as some professionally produced content (some of which is licensed from content owners and some of which is posted by users without regard to copyright). Hosting so much video, however, is expensive and has limited YouTube's profit potential.

Meanwhile, content providers such as NBC, Disney and Viacom are making their own shows available on their branded sites. And then there are subscription-based services such as Netflix, which delivers video online in addition to DVDs through the mail. Finally, a device called Slingbox allows consumers to watch their home television via their computers and mobile gadgets that can connect to the Internet.

These approaches to online television are likely to vie for supremacy for years to come. Time Warner's Bewkes acknowledged in a conference call with analysts and journalists that there are technical and economic details to be sorted out as TV Everywhere launches. In addition, it's unclear how licensing rights will emerge as the bridge between cable and online video is built. Comcast and Time Warner say they need to create a consumer friendly way to access cable subscriptions securely on the Internet.

The one certainty about online video is that just about everything will be tried. "Technically it's becoming easier to deliver video anyway you want to and that's an opportunity for many companies," according to Kendall Whitehouse, senior director of IT at Wharton. "But online video remains a challenge because the monetization models are still emerging."

Andrea M. Matwyshyn, a legal studies and business ethics professor at Wharton, agrees. "There's not one model or platform that's going to clearly win. Increasingly there will be individual viewing styles. Some consumers will stick to cable. Others don't like watching TV on laptops. Others don't want TV and