Time Warner says Internet should make cable TV cheaper
Content providers such as Time Warner (Cable) are beginning to realize that the Internet should make TV cheaper, though, we doubt they’d pass the savings onto consumers.
Time Warner boss Glenn Britt was caught whining about the Internet on the Wall Street Journal, stating that free TV on the Web should reduce the price that Time Warner pays for wholesale programming.
“As cable companies, we are in effect retailers. We buy programming wholesale, we put it in a package, and we sell it to subscribers.
On the wholesale side, we are guaranteeing revenue to the networks. That allows them to turn around and go to movie studios and other producers and to have the programming created.
This whole formula works quite well, and has resulted in arguably the richest choice of programming in the world.
Programmers shouldn’t think that if they put the same content on the Internet for free — at the same time we’re showing it — that we’re going to pay the same wholesale price as we were paying before.”
Britt’s attitude is based on the idea that content providers should pay less (or not asked to pay more) if customers can watch the same stuff online for free. In other words, content owners are underselling content providers, and what’s the point of selling goods the customer can obtain for free (water is the exception to this rule, of course)?
Britt suggests the industry should come up with a new formula for bringing TV to the Web, though, we don’t think that’s how the web works. The Internet often allows for the destruction of middlemen such as cable companies and record labels, enabling consumers to obtain content for less (or free) and enabling artists and content owners to profit more.
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