Time Warner, Comcast Still Denying Existence of Internet

By Mike Schuster Jun 29, 2009 2:50 pm

Cable companies tune out reality.

Here's a fair question: Are cable companies really so out of touch as to be blind to their imminent demise? Or are they, in recognition of their growing obsolescence, frantically making last-ditch efforts to save themselves before the inevitable shift to better -- and cheaper -- entertainment options?

A quick look at the US auto industry would indicate that such efforts are usually doomed to failure.

Last week, Time Warner (TWX) and Comcast (CMCSA) proved that their fingers are nowhere near the pulse of the average TV viewer. Willfully ignoring the rush toward free-but-ad-supported online video like that available on Hulu and YouTube, the 2 cable giants held a press conference to outline their new service, called TV Everywhere, which also provides online content -- but only to current cable subscribers.

TV Everywhere's name is more than a little misleading: Though it will offer premium content via broadband and cellphone, it will be accessible only to those Time Warner or Comcast subscribers who authenticate their customer information. Essentially, the companies are responding to the digital revolution by trying to circumvent it, binding online content -- content currently available for free -- to its old-fashioned, idiot-box-based offerings.

TV Everywhere will roll out its trial run in July, with shows from Turner Broadcasting's TNT and TBS channels -- specifically targeting those outliers willing to pay to watch reruns of The Closer and Tyler Perry's House of Payne.

Payment plans and advertising models are still being ironed out, but one thing is certain: Programming will be available to paying customers only. If a network signs on for the service, its content will be exclusive to TV Everywhere before it's made available elsewhere.

During the conference, Time Warner CEO Jeffrey Bewkes said, "This marks the very logical next evolution of cable TV. Consumers have spoken -- no, more like yelled."

Earth to Jeff: It's pretty clear that customers who asked for more viewing options weren't actually clamoring for the opportunity to pay for a service they were already getting for free.

Hulu owes its success to its streamlined efficiency. Video feeds load fairly quickly, with optimal clarity, and the commercial breaks are briefer and less intrusive than they are on cable television. In fact, ads can command a higher price on Hulu than they do on the networks.

This may be food for thought for those cable companies unwilling to acknowledge the Hulu revolution.

When asked about Time Warner's future relationship with Hulu, Bewkes remarked, "There will be some part [of Time Warner's content] that will be out there [on Hulu]. Short-form content, I think, will continue to be available -- promotional content will continue to be available."

Brilliant.

When networks shun breakthrough technology -- focusing on targeted TV ads, or blocking Netflix's (NFLX) streaming video -- they're only delaying their inevitable demise. Consumers are winning the battle for free online content -- and attempts to strong-arm them into buying subpar cable service simply won't work.

It's like fighting a tsunami with your bare hands.