Web TV You’ll Need to Pay to See: Time Warner, Comcast Roll Out “Authentication.” Who Else Is In?

Published on June 24, 2009
by Peter Kafka

bewkesTime Warner CEO Jeff Bewkes and Comcast CEO Brian Roberts will announce this morning that their two companies are linking up for a trial of an “authentication” effort. This means a handful of cable subscribers will get online access to Time Warner TV shows that have been previously kept off the Web.

The idea is to protect cable subscription revenues by giving pay TV customers–but only pay TV customers–Web access to all the shows they get on TV, and hoping this keeps them from canceling their subscriptions.

But that’s old news: Comcast (CMCSA) already told Bloomberg earlier this month that the two companies are linking up, and that Time Warner (TWX) would offer programming from some of its networks in the first part of Comcast’s tests.

Presumably Bewkes and Roberts will offer up a few more details, like which Time Warner networks are participating (good bet: TNT and/or TBS), along with a timetable. But I worry that the press conference will be light on details, in large part because many of the details haven’t been hammered out yet.

Still, I’ve been able to glean more from industry executives who’ve been involved in discussions with Time Warner, Comcast and other players in the authentication effort, which Bewkes has been calling “TV Everywhere” and Roberts has been calling “OnDemand Online.” Some of the details:

  • The test will start very small–with some 5,000 subscribers–but Comcast is determined to expand it aggressively and wants to have it available throughout its system by the end of the year. Comcast plans to use its Fancast video portal as a hub for its efforts. And it  may use other digital assets it has acquired as well. Online Rolodex Plaxo, for instance, which the company bought last year, could be used to help subscribers sign in to watch their shows.
  • The test is separate from Time Warner Cable’s (TWC) own authentication offering, which is essentially the same thing but will launch later than the Comcast test, using different technology, and will likely offer a different mix of programming.
  • And those tests are separate from the one that telcos Verizon (VZ) and AT&T (T) have been working on with satellite operators Echostar (SATS) and DirecTV (DTV). That one also has the same thrust, but will take the longest to roll out.
  • Comcast isn’t likely to announce other programming partners for the tests until later this month.
  • Hulu is interested in playing along, because its owners–GE’s (GE) NBC, News Corp.’s (NWS) Fox and Disney’s (DIS) ABC–see authentication as a way to appease riled-up cable providers. The cable guys are upset that Hulu shows (some) cable programs for free while they have to pay for the right to air them. In theory, authentication solves that problem for Hulu because everyone will be on a level playing field: Only cable subscribers will get access to cable programming, whether it’s on Hulu, Fancast or anywhere else. But the cable guys aren’t rushing to let Hulu in just yet.
  • Separately, NBC has been talking about offering some cable programming that isn’t already on Hulu for the tests. That could also be seen as an appeasement move, but I’ve heard a more benign suggestion: NBC merely wants to figure out if authentication technology works because it is considering using it for some of its coverage of the Vancouver Olympics next year.
  • CBS (CBS), which isn’t a part of Hulu and which doesn’t have any cable assets of its own, would still like to get into the mix. The idea is that the network would offer the cable guys shows that it has kept offline until now (say, “The Mentalist”) while tying the Web programming to “retransmission” fees it would like to extract from the cable companies for all of its shows. Comcast executives seem amenable to the notion.
  • Big cable players like Viacom (VIA) and Liberty’s (LINTA) Discovery may participate in some trials but not others. Viacom, for instance, has been talking about working with the telco group but not with Comcast during the trials. It has also discussed offering a “premium product”–like access to the full “Spongebob Squarepants” library or other kids’ shows that have a very limited online profile–to Time Warner Cable subscribers for an additional fee.

Bewkes and Roberts are scheduled to speak at the Time Warner Center at 9:45 am EDT, so we’ll know more shortly.

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