The reaction was swift. Activist groups such as world Knowledge and the Media Access Project panned Live Internet TV Everywhere as a way to preserve an entrenched cable business model that limits consumer choices. Experts at Wharton, hitherto, questioned those concerns. “I don’t understand the backlash,” says Peter S. Fader, a marketing professor at Wharton. “It’s a wonderful idea and, if the cable industry gets it just, it will be huge.
YouTube, whose subscribers upload 20 hours of video every minute, features all that amateur video as well as some professionally produced content (some of which is licensed from content owners and some of which is posted by users without regard to copyright). Hosting so much video, however, is expensive and has limited YouTube’s profit potential.
These approaches to online television are belike to vie for supremacy for years to come. Time Warner’s Bewkes acknowledged in a conference call with analysts and journalists that there are technical and economic inside information to be sorted out as TV Everywhere launches. In addition, it’s unclear how licensing rights will issue as the span between cable and online video is reinforced. Comcast and Time Warner say they need to create a consumer friendly way to access cable subscriptions unwaveringly on the Internet.
Andrea M. Matwyshyn, a legal studies and business ethics professor at Wharton, agrees. “There’s not one model or platform that’s going to understandably win. progressively there will be individual wake styles. Some consumers will stick to cable. Others don’t like watching internet TV on laptops. Others don’t want TV and will pick shows à la carte. Viewing habits will be consumer specific.”
Cable companies had to do something to make an Internet television play, according to Faulhaber. Although there have been press reports about consumers dropping cable subscriptions because they believe they can get the programming they want on Hulu and other online services, the bit of people actually newspaper clipping the cord is small, he adds. That means that the cable industry has time to stick in the fray. “These moves absolutely have to happen. I’m shocked that … cable companies, which are the most conservative, have taken such an innovative step.”