Analyst Calls Fox Online Move 'Straw in the Wind'Public Knowledge on pay wall: no one benefits 7/27/2011 09:49:20 AM Eastern
Bernstein Research media analyst Craig Moffett pointed out in an e-mail Wednesday that his "Weekend Media Blast" last week had been about their expectation that content companies would become more restrictive with their content and that "a change in perception of the threat from over-the-top video was inevitable."
That came as a follow-up to the news that Fox would make new broadcast TV episodes exclusively available for eight days after air to customers of participating cable, satellite or telco TV operators.
"It appears that Fox isn't waiting for second quarter Pay TV subscriber numbers to disappoint," he said in response to the Fox announcement. "This model may or may not become a template for others, but it is an unmistakable straw in the wind."
"It is not clear that the current narrative - one where content providers live happily ever after re-purposing their back catalog for online distribution - could survive the blow of a material subscriber loss," Moffett wrote last week. "If a massive collection of reruns and off-syndication content does prove to be a substitute for a $65 Pay TV subscription, even for some "I don't care about sports" people, then the math changes for the content companies in a very big way. The arms dealers would suddenly need to be paid a great deal more."
Public Knowledge, which advocates for fair use rights, wasn't happy with the direction that Fox "straw" was blowing.
"It's a shame we have to see this rerun again," said spokesman Art Brodsky. "Just when consumers are getting access to programming (and advertising) through services like Hulu, you have big media companies like Fox pulling back behind a pay wall. No one will benefit from this."
Free Press, which has had issues with the authentication model (it prefers the term 'tying') was not happy with the Fox move either.
"Free Press does not object to charging money to access online content," said Policy Counsel Corie Wright. "We do object to forcing people to purchase a cable TV subscription in order to watch video content online. The practice limits online video's potential to compete with traditional cable because it makes access to online content contingent on a cable subscription. In other words, you can't ‘cut the cord' if the cable cord is tied to your online video access. This limits competition and consumer choice, further cementing the consumer-unfriendly big cable dominance and porting it to the Internet."
Wright says that in this case, a mitigating factor is the fact that the content would still be available on Hulu Plus, which is a pay service but does not require a cable or satellite subscription. "But if that goes away, this becomes an increasingly worse situation for consumers," she said..