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Chicago Tribune Phil Rosenthal column [Chicago Tribune](Chicago Tribune (IL) Via Acquire Media NewsEdge) Oct. 18--Remember that "Seinfeld" in which Elaine tries to drive one boutique out of business by spending tons of money at a similar shop nearby, only to discover they're both owned by the same person who irked her to begin with? Everyone who's excited about HBO offering its programming via broadband next year to people who eschew cable and satellite needs to think about what's really happening here. This may in fact be a boon to so-called cord cutters. It may be the first step toward giving individuals the opportunity to pay for only the programming they want rather than the current practice of bundling networks, forcing subscribers to subsidize channels for which they have no use. Perhaps it's the future. That's certainly one way to look at it. Another is that, as consumers, we're a bunch of Elaines. The more aggravated we get, the more cash we'll likely wind up forking over to the same folks who upset us in the first place. While we're all contemplating one sort of change, these outfits are focused on the kind they can shake from our pockets -- every last dime -- until we can't see straight. Brian Bertsch, an analyst with Fitch Ratings, noted it's just "an acknowledgment of the ongoing shift in video content consumption patterns that increasingly skew to online or digital streaming formats." The market has been primed over the past decade, as viewers have grown accustomed to on-demand viewing, digital downloads and digital streaming. It culminates in expanding the core business, not abandoning it. All HBO is really saying is that after four decades working one side of the street, it's decided that the advance and embrace of technology now make it worth its while to work the other side before streaming services Netflix, Amazon and Hulu lock up all the business. If cable and telecom companies didn't also sell the kind of high-speed broadband services necessary to keep video streams moving, they might be worried. Instead, they're poised for a free-for-all that won't subside until the last available dollar has been snatched. Look at CBS. A day after HBO's announcement, it actually launched its own stand-alone broadband service. For $5.99 a month, subscribers in markets such as Chicago can watch on their smartphones, tablets or computers the same live feed of WBBM-Ch. 2 they can watch over the air on TV for free or via cable, for which CBS pockets a monthly retransmission fee for each household the cable company serves in a given market. There's also access to a library of old shows, some of which were available online for free before, while some proprietary programming, such as National Football League telecasts, won't be available. Whether that's worth $6 or 6 cents remains to be market-tested, but what about Channels 5, 7, 9, 11 and 32? The best cable channels? The worst? How about games involving the Chicago Bears, Bulls, Blackhawks, Cubs and White Sox? HBO hasn't set a monthly charge yet, but it's all going to add up one way or another. And it's not as though we have limitless funds to spend. "The pie may not grow, but the way the money gets moved around might be different," said venture capitalist Ted Leonsis, a former leader at AOL who's owner of pro basketball's Washington Wizards and pro hockey's Washington Capitals and chairman of Chicago's Groupon. "Maybe a network now getting $1 a month might be only able to get 40 cents a month." Cable companies, on average, pay more than $6 per month per subscriber to carry ESPN, according to media research firm SNL Kagan. If anything, ESPN parent Disney would charge more if it had to sell it on its own to offset the amount it now gets from people who may never watch its programming and protect the value of the bundled deals it now has. But, just to show that these stand-alone services are front of mind behind the scenes, part of ESPN's most recent deal with the National Basketball Association announced earlier this month included a nine-year licensing agreement to establish a framework for an online-only streaming joint venture. Within the TV industry, this bypass of broadcast, cable and satellite is referred to as OTT, or an "over the top" service. For viewers of a certain age, this conjures up memories of "Over the Top," a 1987 Sylvester Stallone flop about an arm-wrestling truck driver out to win the respect of his estranged son that was everything its title promised. Watching Stallone cash his $12 million paycheck would have been more entertaining. But the film nonetheless wound up in heavy rotation on cable in the late '80s and early '90s, helping define the "57 Channels (And Nothin' On)" era that seems quaint by today's standards. Twenty-some years later, some shows and movies still seem to be in a continuous loop. Yet there are countless programs available all the time, many worth watching, and plenty of platforms to watch them on. In the end, it's likely not going to be a question of whether anything's on, but what it's worth. There are many unknowns in this new paradigm, including what happens to the variety of new programming viewers now enjoy if marginal channels don't get a financial boost from stronger ones and whether customer service stands to get better or worse independent of cable companies. What's clear is the momentum, and the money, is headed one way. Everyone in media, whether ad supported or not, is looking for new revenue sources and is determined to land them. Sony plans to launch an Internet TV service. Rupert Murdoch's 21st Century Fox has invested in Roku, which, like Apple, Google and Amazon, puts out devices to help viewers channel streaming shows onto home TVs. Celebrate all of this if you want, but you might want to save your cash rather than pay for party favors. Up to now, cord cutters who had a friend with HBO could access current programs on its online complement service, HBO Go, with a borrowed password. One imagines the data collected through this usage has helped inform HBO's strategy. Although nothing official has been said, the lax policing probably ends. For "Game of Thrones," you'll have to ante up -- and that's just the beginning. [email protected] Twitter @phil_rosenthal ___ (c)2014 the Chicago Tribune Visit the Chicago Tribune at www.chicagotribune.com Distributed by MCT Information Services |