I was reading Sam Schechner’s Wall Street Journal piece, Cable Firms Eye Tablet Space, pointed there by the MCN front page, which was linking to the LA Times Company Town blog – ah, magic of the interwebs – and I thought, “Here is a smart guy who has done the reporting and he’s burying the lead.”
It doesn’t bloody matter whether the cable companies are “eyeing” tablets or any other non-TV-set delivery. The battle over all of this is, and will be for the next few years, about who owns the rights to deliver what content via what delivery systems.
It’s not that negotiations for rights are slow… it’s that they cost a lot more than any cable provider has, so far, shown themselves to be willing to spend. This will surely change, in principle, when Comcast owns NBC/Universal. But the math of it… things may be slower in changing for the consumer when you have have companies scrambling to stay in business/evolve into the new model, like Netflix, paying huge premiums for streaming content.
Disney is a perfect example of this. They are very committed to the future of digital delivery, but their deal with Starz, if Starz re-ups with Netflix, is so fat, not doing the deal would just be obstinate. According to Iger, in the quarterly conference call, they explored a direct relationship with Netflix and found that the Starz deal was “better” for them.
It’s not that this piece doesn’t get to the conclusion that rights are the real issues. It just blurs the basic issue enough for people to be confused about what is really happening.
The one thing that made me start thinking hard was:
“Some distributors are trying to get around the issue by offering services where they say they have existing rights. Dish Network is integrating video-watching ability into its existing TV-remote app by tapping into a technology called Slingbox that it already offers in a pricier set-top box. Slingbox, owned by sister company EchoStar Corp., currently gives users access to shows and recordings on their home set-top boxes from computer Web browsers and mobile phones.”
Slingbox.
Hmmmm…
SLINGBOX!
This is the giant loophole in the machinery. Looking on the web, I can’t find a single significant lawsuit against Slingbox for “site shifting” content. But those rights have not been seen as very valuable until lately. One of the most progressive businesses in site shifting in Major League Baseball and apparently, they made a stink about Slingbox in 2007… but never sued or got their material blocked from Slingbox.
So if I buy Slingbox, do I need to pay $50 a season for the NFL streaming package, which won’t allow me to watch the first weekend of games from Canada while I am at the Toronto Film Festival? Obviously, I am in a very, very narrow group with this issue. But I exist. And as site shifting becomes more mainstreamed, my niche will expand significantly.
More significantly, how do rights owners keep the cable nets from site shifting by way of their own web tools if they are allowing Slingbox to continue to operate unchallenged?
Hulu has already figured out that it needs to be more than a place for recent reruns if it is to remain an entity of value. It is now the depth of content, which cannot be replaced by a Slingbox and your DVR, that is their signature. But the value of “first rerun” is real. A $300 Slingbox means never having to pay $2 (or whatever amount) to watch a show at the gym again. (Note, however, that Slingbox is still not on iPad… which is kinda shocking, really. Seems like an obvious step.)
Is streaming something being broadcast actually rebroadcasting it? Does it matter if you aren’t charging a fee for the service, but just an equipment fee?
I think it’s pretty clear that using your cable/satellite box as the receiver and the web – via Slingbox or any other tool – to make that available to others who are not in your household, is against the law. But Slingbox, used as prescribed, is probably covered by personal use rules. And a cable/satellite company could claim that each subscriber is only getting personal use out of web delivery to other devices, so…
In some ways, it’s so simple. In some ways, not. We still live in a world where I can’t download music from Europe via iTunes because the rights haven’t been worked out.
And Comcast may be the central figure in all of this, as they become fully invested in being both a distributor and a content provider. Time -Warner is already there, but differently, as they aren’t invested in a Big 4 broadcast network. And they have, with HBO, both tried different kinds of post-first-run delivery for their shows and avoided others that you might expect them to exploit.
I still think the next big move is to a more distinctive use of much narrower rights, followed by some very specific kinds of advertising models directed to specific kinds of audiences who pay different amounts for different kinds of access.
The challenge seems to be, for now, maintaining value in each of the areas of exploitation against a tide of technological change. When will the lawsuits start? Well, that is always when the tipping point in these things gets defined, no? As soon as corporations think enough money is coming out of their pockets to make it worthy of their attention.

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