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Why we still can't watch live TV online

Mark Milian
Apple's iPad could enable access to live TV just about anywhere, but it's been a hard sell to media companies.
Apple's iPad could enable access to live TV just about anywhere, but it's been a hard sell to media companies.
STORY HIGHLIGHTS
  • Most TV programming is still exclusive to television sets
  • Networks, news organizations and sports leagues still see challenges with an online live-video model
  • ABC and Major League Baseball are experimenting with live online video
RELATED TOPICS

San Francisco, California (CNN) -- What's the difference between the big screen in your living room, the smaller screen on your laptop or the tiny one in your pocket?

Size aside, there's quite a difference, media executives say.

To many, it's a mystery why we can't easily watch online broadcasts of the TV signals that are transmitted by networks over the air, on cable or via satellite.

Even Bryan Perez, the senior vice president for NBA Digital, admits, "It's a challenge to explain."

The simplified answer is that various media companies have a financial stake in where and how an episode of "Mad Men" can be aired. Networks must weigh the tradeoff between sacrificing viewers on one medium for another and also risk straining their lucrative relationships with cable TV companies.

But Time Warner Cable and Comcast are dipping their toes in the internet-video pool. Comcast is testing a new service that brings Web video and social networks onto the TV screen, according to a report in the Wall Street Journal.

In virtually all of these negotiations, coming to an agreement over streaming live video is no quick task. In addition to the cable and satellite providers, broadcast networks have their own contracts and input, and so do the sports leagues.

Here are some of the reasons why you won't see much live TV online -- yet:

Sports organizations must navigate complex contracts

"It's incredibly tricky," Perez of NBA Digital said at a conference recently. "The place where, I guess, I feel it the most is that the consumer doesn't necessarily understand it."

When not presented with a logical answer from the usual providers, viewers are looking elsewhere -- not unlike when consumers first sought free digital outlets for music (and online piracy) in the early 2000s.

Sports leagues, especially, struggle with internet piracy of their games.

"We spend a lot of time talking to all of our partners. We spend a lot of time negotiating agreements," Perez said, responding onstage to a question from CNN. "There are a lot of times when we're frustrated. ... There are already things that we're doing that weren't even possible with the old agreements."

The National Basketball Association streams few live games but offers a library of dunk highlights and clips.

Major League Baseball also offers free clips, but it has a unique service allowing subscribers to sign up for access to a smattering of live games over the Web. In this new area, finding the right price to charge for live streaming has been a challenge, said Bob Bowman, president and chief executive of MLB Advanced Media.

"We don't know that if we cut the price by half, then we'll double the sales," Bowman said at the same Open Mobile Summit. "We don't believe our high-end-quality content should be free."

Across its networks, MLB gets 10 million visitors per day, and its iPhone app has been downloaded 2 million times, Bowman said.

Broadcasters strive not to 'confuse' viewers

Another sports juggernaut, ESPN, is beginning to lower its shoulder into streaming games.

The network recently launched an on-demand channel for Xbox Live subscribers to access a limited number of live games. It also recently struck a deal with Time Warner Cable to allow subscribers to watch ESPN's live sports broadband network over the internet. Time Warner is the parent company of CNN.

ESPN has given a lot of names to its digital products -- ESPN3.com, ESPN Mobile TV, ESPN Everywhere. The partnership with Time Warner is purposely being called, simply, ESPN. That's perhaps an acknowledgement that online access to its channel shouldn't be viewed as different from watching it on a TV set.

"The problem is we're confusing the heck out of consumers with these" service names, said Tim Connolly, mobile vice president for ESPN parent ABC. "We've done a great job of confusing them all."

ABC, which has an iPad app for its flagship programming, is more confident in the packaging model that cable offers than an online subscription or a la carte service, Connolly said at the conference.

"We haven't done any of this discussion -- $10.99 for ESPN per month or whatever," Connolly said. "But we think it's much better to get a mass distribution of cable television."

'Cord cutters'

Most cable executives minimize any trend toward "cord cutting" -- that is, people canceling cable or satellite subscriptions in favor of Web-only entertainment.

Regardless, some TV providers -- including Time Warner and Comcast -- are reporting declines in subscribers.

With new content just a button away, the bundled cable model could foster a better landscape for competition than the a la carte Web model, which forces users to make a separate purchase each time, Connolly said. He used "Mad Men" as an example -- a cable TV hit that seemingly emerged from nowhere courtesy of AMC, which wasn't commonly known for high-quality, original programming.

For sure, the economics of cable is certainly a financially viable one, said Kinsey Wilson, senior vice president of National Public Radio. "A bundled world is always more lucrative because you have control of a distribution outlet," he said.

CNN launched an application for the iPad Video on Tuesday, which lets users watch live video on the device as news unfolds.

Wilson, a longtime newsman, compared the obstacles facing TV companies in the internet age to the recent tidal wave that has upended the newspaper industry.

"Because the internet tends to unbundle everything, it becomes increasingly difficult to fight that tide," he said.

[TECH: NEWSPULSE]

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