Last week’s announcement by Comcast and Time Warner Cable that the two biggest MSOs would work together on an authentication could determine the fate of online video for everyone—at least when it comes to premium content. They are the biggest boys on the cable block. They will test the market first, make all the mistakes and attempt to devise a scheme that meets their objectives while keeping their customers relatively satisfied. Sure, the telcos might go a different direction. Same thing for DirecTV and EchoStar. But cable remains the multichannel king, and the actions taken by Comcast and Time Warner Cable—if successful—will likely shape big media’s online video business model for years to come.

There are both advantages and pitfalls for these two giants. Advantage: Both will gain valuable marketing information by plunging in first and testing the concept in trial markets. Pitfall: They will become lightning rods if consumers start to believe that authentication is a conspiracy by corporate leviathans to “control” the Internet.

So far, criticism has been somewhat muted. Sure, consumer groups are mad, and numerous articles and blogs have expressed skepticism, but last week’s announcement didn’t seem to draw the kind of fire attracted by Time Warner Cable’s earlier broadband metering plan. That doesn’t mean such opposition won’t eventually form. But at least for now, people are holding their collective tongues and pens—or at least tempering their vitriol. The most likely reason is that so few people really understand what “TV Everywhere” means—and how authentication will work. It’s hard to criticize something that isn’t yet defined (although it hasn’t stopped people before). The truth is that even those trying to enact authentication aren’t sure of what business rules to put forth and how those rules will dictate what content appears where and for whom. That’s the point of the trials that Comcast and Time Warner Cable will conduct in the coming months: These corporations want to run a few things up the public flagpole and see who salutes—and hopefully tailor the ultimate scheme accordingly. That’s smart. But will it be enough to convince the public that TV Everywhere is a good thing, and not simply another attempt by big media to extend its content stranglehold?

Comcast and Time Warner Cable must move forward cautiously. Here are some key questions that the industry must work out before consumers give their final verdict on TV Everywhere:

        Is it a free value add for paying cable customers or another “tier” of service requiring an extra monthly fee?

        Is it for unlimited devices? If not, will consumers be able to watch authenticated online video on a few devices for free, and pay to watch it on a few more devices or for an unlimited plan?

        Is content available across geographies as most would advocate? If so, what will this mean for cable operators in college and resort towns where seasonal business is vital (ie, what college student or vacationer is going to order local cable for a few months if they can get authenticated content through a laptop from their home cable system?).

        Is authenticated content streamed live from several or all networks? Or is it all on-demand content? Or is it a combination of both?

        Is authenticated content only available through MSO portal sites or will one password gain users access to it from any site, including portals, aggregator sites (ie, Hulu) and individual cable network sites? Prediction: Most big programmers will insist on much (or even all) authenticated content residing outside the MSO portals.

        Who controls the advertising? This is huge. Programmers will want to retain full control. Some MSOs might want a piece—especially for content viewed through MSO portals. Good luck, negotiators.

        How much piracy is too much? No one believes any authentication system will be iron-clad. People will figure out how to spoof the system to view content even if they don’t subscribe to a multichannel service. The industry will need to determine how much piracy it’s willing to tolerate.

        How does all of this mesh with new advanced set tops? In a world of tru2way boxes that seamlessly integrate Internet content with linear TV and VOD fare, does it make sense to maintain all of these different platforms? And if not, does it really matter as long as authentication somehow preserves the dual-revenue stream for programmers and the customer base of operators? How do all these platforms mesh—and how do advertisers measure them?

        Is there a plan for educating consumers about authentication? If so, how will the cable industry proactively address critics while winning over often skeptical consumers?

No one has the answer to any of these questions right now. And the above queries don’t even scrape the tip of a massive glacier of confusion that extends for miles below sea level. This stuff will be difficult. And operators are going to find they share little common ground with many programmers—at least when the conversation moves beyond the conceptual and into the tactical. The question is whether Comcast and Time Warner Cable—both because of their size and influence as operators, as well as their ability to leverage their own vertically owned content—will create enough momentum to convince the rest of the industry to come along. It’s hard to bet against such powerful forces. But let’s face it: No one is putting down all the chips quite yet. And consumers run the casino.

(Michael Grebb is executive editor of CableFAX Daily)

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