ESPN started the practice back in 2009 of tying online content access to a pay-TV subscription. And while it’s taken a while to catch on, the trend is starting to gather serious momentum. HBO has extended its campaign of streaming content behind a subscription-based authentication wall, and now Fox is getting in the game by pulling new episodes away from free websites, including its own Fox.com. Peter Kafka of All Things Digital reports that ABC may be next in line.
Here’s the thing. While ESPN and HBO have always been premium channels, Fox and ABC are part of the free broadcast television line-up, and the idea of paying for online access is a bit hard to swallow. If I own a computer instead of a TV (think dorm room), why shouldn’t I still be able to watch prime-time television?
The problem is that the business dynamics today are far different from what they were when cable television first entered the scene. First, online video delivery costs money above and beyond what it takes to broadcast OTA content. Second, cable (and telco and satellite) retransmission fees are a big part of programmers’ revenues, which means they have every incentive to make pay-TV subscription packages more valuable with exclusive content. And third, consumers can get free or cheap entertainment in a lot of different ways today, which means broadcast television really does align more closely with premium content than it did back in the 1980s and 90s.
I don’t like the idea of having to pay (directly or indirectly) for Fox content online any more than anyone else, but from a business standpoint, the programmer’s decision certainly makes sense. At least it does unless and until Fox starts to lose audiences. The question is, do consumers want their Fox content today as much as they wanted their MTV 20 years ago.