Question about streaming video from TV channel sites

Factual Questions
1

I’ll use the History channel as an example, although I know they are not the only company to do this. If you have a cable or satellite subscription that includes the History channel, you can enter your login to stream shows from them, at no extra cost. If you don’t have the TV subscription, it is not an option to pay them for streaming and streaming only. Why do they do this? You would think that with so many people abandoning cable for streaming, the networks could make a lot of money by offering standalone streaming.

2

FWIW, HBO just launched their standalone streaming service this week. No cable subscription required. But it’s difficult.

  1. The cable networks want revenue for their products, but they don’t want to be in the business of billing people and collecting money. They would rather let cable companies bill you and take a cut, because they are already set up to do so. As you note, consumer demand is changing things, but it will take time. Even HBONow is not going to bill you directly; they’re relying on device makers like Apple and Roku to handle their billing.

  2. There are licensing concerns. Cable channels buy TV shows from producers who license them to be shown on cable. The channels may not have license to stream them directly, because the original producers may want to retain that option for themselves. In some cases, they can stream the programming but only to people who already pay for the cable channel, thus requiring the cable service authentication mechanism. To go to “pure” streaming, cable channels will need to build up a library of content over time that they can stream without the cable distribution license.

3

I’ll add

  1. Cable/satellite systems are big, big customers, and much of their business comes from providing unique channels that people can’t get otherwise. If the cable channels decide to offer their product to individuals, the big systems may decide the channel is no longer unique enough for them to pay for. It takes an awful lot of individual purchases to make up for one large cable system.
4

And collecting a fee for every basic cable subscriber, including those who wouldn’t be caught dead watching The History Channel, is a good reason not to kill the goose that lays the golden eggs.

5

The entertainment business has always been about distribution and the internet has already fundamentally changed how music is distributed.

There is no question that business models for video distribution will evolve as well. It’s all still pretty new because, frankly, serious streaming capability is a relatively new technology.

Hell, it wasn’t that long ago that getting a herky-jerky 4 frames per second video streaming from my office to my home was state-of-the-art technological magic.

So just hang on for the ride, it’s all going to get real interesting, real soon.