Cable should charge for TV on PCs
March 4, 2009
Just as Comcast and other Pay TV operators have announced plans to push high-value cable network programming to the PC, research from TDG suggests that their intention to not charge for this content could be a major strategic error and leave hundreds of millions in additional fees on the table.
"Cable operators are working aggressively to neutralise the growing threat of online video (both PC-based and Over-the-Top) and the inevitable erosion of traditional Pay TV viewership," noted Michael Greeson, President of TDG and director of TDG’s quantitative research initiatives. "Making their best content available for online viewing through their own branded portals instead of online aggregators such as Hulu is the right strategy at the right time. Even incumbent Pay TV operators – the antithesis of fast-movers when it comes to Internet video -understand that very soon their one-stop, one-screen TV services will be challenged by alternative conduits and new screens."
Greeson argues, however, that doing this for free, as an "entitlement" to existing Pay TV subscribers, "undervalues the very content which has for years driven subscriptions and overlooks a sizeable opportunity to grow revenue and profits at a time during which simply avoiding collapse is seen as a major accomplishment for operators."
According to TDG’s research, 43 per cent of broadband consumers are interested in viewing their linear Pay TV content on their PCs, two thirds of which (29 per cent) are willing to pay at least $10 per month for the service.
Greeson, using Comcast as an example, added: "Comcast has close to 17 million digital TV subscribers and 15 million broadband Internet subscribers. If 29 per cent of Comcast’s broadband Internet subscribers (4.35 million) would spend an extra $10 per month to have their current TV programming delivered to their PCs, that’s an additional $43.5 million in gross revenue each month."