(WIRED) -- Two cable powerhouses have announced an ambitious pilot program that aims to convince their customers that, actually, TV on the web should not be free.
Jeffrey Bewkes, chairman and CEO of Time Warner, speaks at the NCTA conference in Washington.
With a service called TV Everywhere, Comcast and Time Warner will give cable subscribers access to "premium" television content via broadband, and later cellphone connections.
To begin with, 5,000 Comcast subscribers will begin testing the system next month, giving them access to Time Warner's TBS and TNT channels on their computers, and the same channels' video-on-demand catalogs on their cable boxes.
If you made peace long ago with the idea of paying a monthly cable bill, this probably sounds great. It means watching your existing subscription on new screens without paying additional fees or buying more hardware. (Of course, as consumers adopt TV Everywhere, they can probably expect price increases.)
But if you prefer to watch your television for free on ad-supported sites like Hulu while paying only for the internet connection that delivers it, you could be in for a rude awakening. TV Everywhere represents an alternative -- and possible threat -- to the popular Hulu model.
If the pilot program impresses the group -- and proves to other networks that its user-authentication system is secure -- Comcast and Time Warner expect the other television programmers, ISPs and mobile providers to join, giving all cable subscribers a way to watch the content they pay for on their televisions using any broadband-connected computer or authenticated cellphone.
Already "at least 92 percent of Americans qualify to watch this for free online," according to Jeff Bewkes, chairman and CEO of Time Warner.
For these subscribers, TV Everywhere represents a potential win. The only question is whether they will keep paying for the old cable subscription model as their viewing habits shift online.
There's nothing to stop television networks from putting their content on both Hulu and TV Everywhere, because TV Everywhere's contract will be non-exclusive, according to Bewkes. However, given the choice between Hulu and TV Everywhere, television programmers have an incentive to go with the latter.
Only the TV Everywhere model promises to port yesterday's lucrative business model onto today's platforms. And that, according to some critics, is exactly the problem.
"[TV Everywhere] raises substantial anti-competitive issues by restricting the availability of programming to the favored distribution methods," said Gigi B. Sohn, president and co-founder of the public interest group Public Knowledge. "Under the TV Everywhere plan, no other program distributors would be able to emerge, and no consumers will be able to 'cut the cord' because they find what they want online. As a result, consumers will be the losers.
"In addition, we are concerned that this program violates the open nature of the internet. By adding this additional toll lane, Comcast and Time Warner want to create their own 'managed channel' within the internet and turn the internet into their own private cable channel."
So, what about Hulu? Will its deals fall through given this new option?
"There will be some part [of Time Warner's content] that will be out there [on Hulu], said Bewkes."Short-form content, I think, will continue to be available -- promotional content will continue to be available."
However, only cable subscribers will be able to access other content online -- through officially licensed avenues, anyway.
Bewkes added that some other television programmers have avoided Hulu "for security concerns and because they didn't like the model," but that they will give TV Everywhere a chance.
"Consumers vote every single month with their pocketbook," he added. "They don't have to subscribe to cable. They don't have to pay for these services, yet they do. The number of people paying for subscription television has gone up and up and up every single quarter that we've been in the business."
Subscribe to WIRED magazine for less than $1 an issue and get a FREE GIFT! Click here!
Copyright 2009 Wired.com.
All About Comcast Corporation • Time Warner Cable Inc.