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Time Warner, Comcast Partner in Online TV Business Model

24 Jun, 2009 By: Erik Gruenwedel

Time Warner Inc. and Comcast Corp. June 24 said they have partnered to create a new business model called “TV Everywhere” aimed at offering repurposed television content online.

The agreement between the companies makes it possible for Comcast subscribers to access programming from Time Warner’s HBO, TNT and CNN networks free online and on demand. Comcast said it would begin a national trial of its “On Demand Online” service in July carrying programming from TNT and TBS networks.

TNT programming includes “The Closer” and “Saving Grace,” as well as TBS’ “Tyler Perry’s Meet the Browns” and “My Boys,” among others. The shows will be initially accessible on Comcast.net and Fancast.com, in addition to TNT.tv and TBS.com.

Comcast’s on-demand platform incorporates three options, which include season premiers of select shows (Showtime’s “Nurse Jackie” and Animal Planet’s “Jockeys”) one week before their TV bow; day-after episodic programming from “Weeds,” “Entourage,” “Rescue Me,” “Monk,” “Whale Wars” and “Curb Your Enthusiasm,” among others; and so-called “catch-up” of previous TV seasons.

As previously mentioned during financial calls, Time Warner CEO Jeff Bewkes said “TV Everywhere” would allow subscribers of any third-party cable, satellite or Telco video distributor to access content streams for free provided they were paying members somewhere in the distribution channel.

“This progressive approach to delivering TV content online will enable the continued vibrancy and growth of distribution outlets, their content partners and advertising clients,” Bewkes said in a statement.

“TV Everywhere” also is earmarked to challenge the burgeoning market for repurposed streams of TV programming and movies offered for free online at Hulu.com, TV.com and others. Specifically, Time Warner, Comcast (the nation’s largest cable operator) and increasingly Wall Street are becoming alarmed at the hype surrounding Hulu and its effect on the reported $22 billion in annual license fees cable companies and satellite operators pay studios and media companies for first-run TV fare.

Hulu is co-owned by News Corp., The Walt Disney Co. and NBC Universal, while TV.com is owned by CBS Corp.

Executives at News Corp. and CBS contend Hulu and TV.com offer an alternative to the current syndication business model that has been hit hard by advertising declines in local TV markets.

Indeed, Disney CEO Bob Iger, in analyst calls, has criticized the “TV Everywhere” concept for its exclusionary stance, even characterizing it as anti-consumer.

Independent analyst Rob Enderle said “TV Everywhere” could easily be considered an anti-Hulu strategic move. He said Hulu clearly endangers cable companies with its advanced technology and HD option that could motivate viewers to shun cable for TV consumption.
“With this move, cable could become relevant again, and, because the revenue path is more certain and understood, studios would be more willing to free up rights and allow them to have the kind of access [to content] that Hulu is still struggling to get,” Enderle said.

The analyst said “TV Everywhere” is potentially a more lucrative model than Hulu due to the subscriber base for cable.

“Everyone is focused on sales and profits like a laser at the moment,” Enderle said.

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