The cable industry's TV Everywhere initiative is being attacked by seven consumer advocacy groups that claim the plan stifles competition in the emerging market for online television programming.
The groups - Free Press, Media Access Project, Consumer Federation of America, Consumers Union, Open Technology Institute, Participatory Culture Foundation and Public Knowledge - say TV Everywhere is the result of "illegal collusion," and have filed letters with the Department of Justice, the FTC and a number of congressional committees, calling for an investigation. (via MediaBuyerPlanner).
Textbook Antitrust
The call for an investigation is based on a Free Press report which claims that giant cable, satellite and phone companies, and many leading programming networks, led by Comcast and Time Warner are colluding to "eliminate the threat of online competition, limit consumer choice, and build on the cable TV model that gouges consumers."
"This is a textbook antitrust violation," said Marvin Ammori, a law professor at the University of Nebraska, senior adviser to Free Press, and author of the report. "The old media giants are working together to kill off innovative online competitors and carve up the market for themselves. TV Everywhere is designed to eliminate competition at a pivotal moment in the history of television."
Fledgling Ad Opportunities
TV Everywhere is an industry wide initiative that lets consumers who pay for cable or satellite TV to access programming online or via mobile devices. Still an offering in its infancy, it is unclear exactly what type of ad services will be offered through the service - although it is widely expected that there will be monetization opportunities.
Comcast, for example, is the first company to have launched its TV Everywhere service, calling it Fancast Xfinity. The site contains 2,000+ hours of content, including shows - and indeed, entire seasons of shows - from content partners like HBO, Cinemax, Starz, TNS, TNT, A&E, AMC, Discovery Channel, History, and BBC America. Its ad strategy, though, is still a work in progress with the big question - how many ads will customers be willing to view on the web - as yet unanswered.
Conventional wisdom in the TV industry is that web users will be less receptive to viewing the same number of ads that air during a regular television show, Reuters reports.
Some networks are experimenting with abbreviated ad load that have an ad before and after the program. Others are testing a full ad load, similar to what is on television. Comcast and the networks are also working with Nielsen's Commercial Ratings system, or "C3," to make sure its on-demand video offerings can be measured using the C3 system.
Unfettered Opportunities
These opportunities could presumably be multiplied under an unfettered internet TV market, according to Free Press. Ben Scott, policy director, says internet TV could "actually inject much needed competition into a TV market long dominated by cable companies."
More competition means lower prices for consumers, he says, adding, "The internet offers the potential for democratizing the TV screen now controlled by a handful of powerful media companies."
