CBS and Time Warner Cable finally reached a deal today, ending a long, protracted blackout of the broadcast network on TWC’s cable system. While getting the deal done will mean that Time Warner Cable viewers will be able to watch Week One of the NFL season next week — and no one wanted to miss that — the deal is also designed to help CBS monetize its content on a growing number of new platforms.
Increasingly, agreements between networks and cable operators are getting hung up on the question of digital rights whenever those contracts come up. In the case of CBS, the network has been pretty cautious about how viewers watch its shows on their computers and on other devices. While the other broadcasters made their content available through Hulu and Hulu Plus, CBS forced viewers to watch its shows on CBS.com.
It was also one of the last networks to embrace the growing tablet market, waiting until this spring before finally launching its iPhone and iPad application. (Just for comparison, ABC introduced its full-episode iOS app with the launch of the iPad, way back in 2010. Hulu Plus wasn’t far behind, launching its iPad app a few months later.)
Interestingly enough, CBS’ digital platforms became a battleground in the dispute with Time Warner Cable. At the same time that the cable operator blacked out the CBS signal in many of its major networks, CBS kept Time Warner Cable broadband subscribers from accessing its full-length episodes on CBS.com.
With the latest retrans deal, it appears CBS continues to seek control over its digital rights. While terms of the deal weren’t disclosed, CBS CEO Les Moonves wrote in a memo to employees that the deal would give CBS the ability to monetize its content on “all the new, developing platforms that are now transforming the way people watch television.”
That could mean a bunch of things. For one, it could mean that CBS, like Fox before it, could seek to limit its viewership online to those people who pay cable operators like Time Warner Cable to view its content. A few years ago, Fox made the (then) unprecedented decision to require viewers to log in or authenticate with their cable subscription password to view shows the day after they aired. Don’t have a cable subscription? Well then, you’d have to wait until a week later to watch the latest episode of your favorite show.
Authentication isn’t exactly a new thing: the concept has been around ever since Comcast and Time Warner announced their plans for TV Everywhere back in 2010. But Fox was the first broadcaster to embrace the cable login as a way to screen out non-cable subscribers on Hulu and its own properties.
While it doesn’t appear that CBS plans to roll out its own password-protected pay wall quite yet, it’s building a foundation that would enable it to do so. A CBS spokesperson confirmed to me that in all its most recent deals, there is a framework for TV Everywhere-type authentication. The Time Warner Cable deal is no exception.
Being able to monetize on emerging platforms could also mean having the freedom to license TV rights to new, emerging players in the market. CBS, of course, has profited handsomely from the emergence of digital distributors like Netflix. In fact, digital licensing is one of the fastest-growing parts of its business, especially with the emergence of players like Amazon Prime Instant Videos and Redbox Instant by Verizon.
Even more streaming services are set to emerge: Intel has been working to secure deals with content providers for an over-the-top cable alternative that it plans to roll out. Sony also is working on a streaming video service, for which it has reportedly struck a deal with Viacom. With more services emerging, CBS will want the flexibility to license its programming on new services in addition to the old.
CBS and Time Warner Cable weren’t the first partners to get hung up on the question of digital rights, and they’re unlikely to be the last. Until the industry can agree on a more standard template for who can do what with which content on whatever platform, those blackouts and disagreements will likely continue.