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Time Warner ‘Incentives’ Look to Spoil New Web TV

19 Jun, 2013 By: Doug McPherson

NEW YORK – Time Warner Cable and other pay-TV operators are offering “incentives” to media companies that agree to withhold content from Web-based entertainment services, such as those pursued by Intel Corp and Apple Inc., reports Bloomberg News

The incentives might be higher payments or threats to drop programming.

Time Warner CEO Glenn Britt has reportedly said that among Time Warner Cable’s 300-plus contracts, some may bar media outlets from providing content to online pay-TV services. “We may well have ones that have that prohibition,” Britt said at a conference in Washington last week. “This is not a cookie-cutter kind of business.”

He added that some agreements require media companies that license content to Web-based systems to offer the same online rights to Time Warner Cable.

Incumbent cable-TV companies and telecommunications providers have rights to distribute TV and movies over their networks. But lined up against them are technology companies such as Intel, Apple and Google – all ready to cut deals that would let them provide programming via the Web. Analysts says these newcomers have been working on devices, software and services that have failed to loosen the grip of cable and satellite distributors because they haven’t secured enough content to woo customers.

Charter Communications, the fourth-largest cable company, also seeks to protect the existing pay-TV “ecosystem,” Chief Financial Officer Chris Winfrey said last week. “It’s in everybody’s mutual interest that we are protecting the ecosystem in a way that continues to keep the value of that programming that we have and the way it’s delivered to our subscribers today,” Winfrey said.

Maureen Huff, a spokeswoman for New York-based Time Warner Cable, wrote in an E-mail last week, “Exclusivities and windows are extremely common in the entertainment industry. It’s absurd to suggest that, in today’s highly competitive video marketplace, obtaining some level of exclusivity is anticompetitive.”

AT&T is reportedly negotiating paying less to media companies that also provide content to Internet-based services. Jeff Weber, AT&T president of content, said, “If they’re going to go over-the-top, then that’s a very different conversation and a very different value for our customers,” Weber said. “Exclusive versus non-exclusive has materially different value for our customers. And I think we would want that reflected.”

The U.S. Justice Department is investigating whether cable companies are violating antitrust laws by limiting competition from Internet video providers, people familiar with the matter said in June 2012.

Gigi Sohn, president and co-founder of Public Knowledge, a Washington-based consumer-rights group that focuses on communications and technology issues, has said the pay-TV companies’ actions are anticompetitive. “Is it anticompetitive generally? Of course it is, they are keeping programming from their competitors,” Sohn said. “Does it rise to the level of antitrust violation? That’s something for the Department of Justice to decide.”

The plight of the Internet-based services is similar to when satellite companies couldn’t get access to media companies’ content until Congress passed legislation in 1992, Sohn said. Government regulators may need to get involved to grant technology companies similar access, she said.

“These sorts of practices are as old as the hills,” she said. “Over-the-top providers are in regulatory ‘no man’s land,’ and they can’t get access to the programming.”

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