Web/TV Divide is Back in Focus With NBC Sale
As she prepared her daughter for college, Anne Sweeney insisted that a television be among the dorm room accessories.
“Mom, you don’t understand. I don’t need it,” her 19-year-old responded, saying she could watch whatever she wanted on her computer, at no charge.
That flustered Sweeney, who happens to be the president of the Disney-ABC Television Group.
“You’re going to have a television if I have to nail it to your wall,” she told her daughter, according to comments she made at a Reuters event this week. “You have to have one.”
But she does not, actually. For 60 years, TV could be watched only one way: through the television set. Now, though, millions watch shows like “Grey’s Anatomy” on demand and online on network Web sites like Sweeney’s ABC.com and on the Internet’s most popular streaming hub, Hulu.com.
How people watch TV on demand — and whether they should pay for the privilege — is a critical issue in the landmark deal, announced Thursday, that will give Comcast control of NBC Universal. In the deal, Comcast will become a co-owner of Hulu.
Like all its broadcast rivals, NBC rushed to put its popular shows on the Web years ago, hoping to secure a piece of the booming online advertising market and offset an eroding audience.
The viewers came in droves, but the ad revenues have not materialized as expected. By giving away TV episodes online, “the industry is literally tossing money and premium content away,” Barry M. Meyer, the Warner Brothers Entertainment chief executive, said in a speech in October.
Comcast, the country’s largest cable operator, has already been using its considerable muscle to limit how many shows are available online, lest people think they can cancel their costly cable subscriptions and watch free online. Now the company — which, if the NBC deal passes government muster, will own a piece of the biggest site that threatens to undercut its core business — is looking for ways to charge for ubiquitous access to shows.
With millions now watching TV on their computers, can the media companies put the Hulu genie back in the bottle?
The scramble by TV companies to preserve its ad model while giving consumers choice — what Comcast’s chief executive called in interviews Thursday “anytime, anywhere media” — mirrors the efforts of newspapers, magazines and radio companies to wring more money from digital media. But all are facing some entrenched habits.
“If you disrupt the consumer experience, you’re in trouble,” warns Mike Kelley, a partner at PricewaterhouseCoopers.
Stephen B. Burke, the chief operating officer of Comcast, recently called streaming “the biggest social movement I’ve ever seen.… Online video consumption is off the charts.”
NBC and the News Corp., the owner of Fox, jointly formed Hulu in 2007. Disney later became an equity partner in Hulu. On Hulu and sites like it, TV episodes are available any time, usually for a full month after they premiere; the images are crystal clear, and the commercial breaks are short.