Wall Street analysts are predicting the end of free video streaming in the near-term as media and cable companies regain control over online content for themselves.

Cable companies are partnering with content producers to move a growing amount of streamed video content behind paywalls in an effort to protect their core business profits.

The trend is evolving so rapidly, analysts like Laura Martin with Needham & Co. predict the end of free streaming is imminent.  Either customers will pay upfront or use TV Everywhere “authentication platforms” that require evidence of a pay television subscription before being able to watch.

Craig Moffett, an analyst with Sanford Bernstein, perennially sees cable operators as the most likely winners in the billion-dollar entertainment battle.

“They’re winning the broadband wars,” Moffett says of the cable industry. “Broadband is increasingly the flagship product, not the video distribution business.”

Cable networks and program producers are growing increasingly alarmed at the impact video streaming services like Hulu and Netflix are having on their bottom lines.

Case in point: the fall of Nickelodeon, a popular children’s cable network that used to guarantee high ratings and lucrative ad revenue.  Recently the network has fallen off the ratings cliff.  Some careful analysis found the reason why: Netflix.  Nickelodeon, along with many other cable networks, licensed a number of their series to Netflix for on-demand viewing. In households with young children, parents increasingly choose the on-demand Netflix experience for family viewing over the traditional cable channel.

Moffett

That’s a major problem for content producers and networks, and Moffett quotes industry insiders who predict licensing deals for Netflix streaming will increasingly not be renewed (perhaps at any price) as networks retrench to protect their core business.  What is left will soon be behind paywalls, limited to customers who already subscribe to a pay television service.

That line of thinking is already apparent at Time Warner (Entertainment), Inc., where CEO Jeff Bewkes rarely has a good thing to say about Netflix.  His company refuses to license a significant amount of their content for online streaming because it erodes more profitable viewing elsewhere.

Time Warner only licenses older content and certain “serialized dramas” that have proven difficult to syndicate on traditional broadcast television or cable outlets.  But the company keeps kid shows to itself and its own distribution platforms, like Cartoon Network.

When it does let shows go online, it wants them behind paywalls.

Bewkes applauded Hulu’s recently announced plans to move its service away from free viewing.  Authenticating viewers as pay TV subscribers before they can watch “makes sense” to Bewkes.

“Hulu is moving in the right direction now,” Bewkes said.

Big media companies do not want significant changes to the viewing landscape, where major networks front the costs for the most expensive series, and cable networks commission lower budget programs and repurpose off-network content.  Pay television providers bundle the entire lineup into an enormous package consumers pay to receive. That is the way it will stay if they have their say.

“Just because consumers would rather get individual channels a-la-carte, on-demand, and streamed — only what they want to pay for — [if they think] that is inevitably the way the world if going to evolve, not so fast,” Moffett said. “It may be the way consumers want it and it may be the way technologists want it, but the media companies have a say here.”

“There is no way they are going to voluntarily unbundle themselves,” Moffett said.

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Craig Moffett talks about the current state of the media business on Bloomberg News.  He sees trouble ahead for online video streaming, as powerful media and entertainment content distribution companies reposition themselves to better control their content… and the revenue it earns.  The big winners: Cable operators, Hollywood, and major cable networks.  The losers: Consumers, Netflix, Hulu, and free video streaming. (11 minutes)

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Laura Martin with Needham & Co. predicts the imminent demise of free video streaming. Media companies can’t handle the loss of control over their programming, and the erosion of viewers (and ad revenue) it brings.  Martin tells Bloomberg News she sees a future of paywalls blocking access to an increasing amount of online video content.  (5 minutes)

AT&T will increase the capacity of Tampa Bay’s cell phone network to handle 4-5 times the traffic it used to, to serve the needs of the upcoming three-day Republican National Convention to be held in the city in late August.

AT&T will shower the convention and its host city with at least $15 million towards 500 network upgrades around Tampa Bay.  More than 200 AT&T Wi-Fi hotspots are being added to the existing network and cell tower improvements are underway on 85 area cell towers.

Tampa Bay media reports AT&T’s investments come as a result of the political convention.  AT&T is one of the group’s largest donors, contributing more than $1 million in cash and free cell phones and calling plans to Republican convention coffers.  AT&T’s enormous contributions prompted the Tampa Bay Host Committee, which is coordinating the event, to organize a media splash with local dignitaries to highlight AT&T’s efforts and image.

When the event is over, Tampa Bay residents will be able to enjoy the benefits of that investment.  The equipment and expanded service will remain in place.

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WTVT highlights AT&T’s network expansion now underway in Tampa Bay, to support the upcoming Republican National Convention.  (2 minutes)

A TV news crew from Salt Lake City that sent undercover reporters into an AT&T store, successfully reactivating a smartphone reported lost or stolen, returned Tuesday with cameras running looking for answers.

KTVX News found AT&T stores maintain activation policies that are exceptionally friendly to smartphone thieves, who can reactivate lost or stolen phones with no questions asked.

Stop the Cap! shared video from the station earlier this week showing AT&T employees making life difficult for victims of cell phone theft, but enthusiastically willing to collect money from new customers who received or purchased the stolen property.

A California class action lawsuit has been filed against AT&T over how it handles stolen cell phones.

According to the suit AT&T is, “forcing legitimate customers…to buy new cell phones, and buy new cell phone plans, while the criminals who stole the phone are able to simply walk into AT&T store and re-activate the devices using different, cheap, readily available SIM cards.”

KTVX originally sought to check whether AT&T had the same thief-friendly policies in place in Utah.  It turned out the answer was yes — AT&T will turn back on any phone as long as you “put money on it.”

Text from a California class action lawsuit against AT&T

“All you would have to do is pay for the plan,” said an unnamed AT&T store employee. “We’ll set up your account with your ID, and then put the new SIM card in there and put money on it.”

A day after the undercover operation, the TV station confronted the manager at the AT&T store just outside Valley Fair Mall, in West Valley City. He refused to answer questions.

“You can’t tell us anything about whether you know employees are doing that here?” asked reporter Brian Carlson.

“I’m not going to give you any comment on that,” he said.

The store manager referred questions to a regional AT&T representative, but the station could only reach his voicemail.

AT&T’s reactivation policies are not shared by Verizon Wireless, which claims it will not reactivate a phone reported lost or stolen on its network for any reason, except if the request comes from the original phone owner.  AT&T’s policies, according to the lawsuit, help fuel cell phone theft by making it easy for thieves to sell stolen equipment to buyers confident they can reactivate and use the equipment immediately after purchase.

AT&T says they’re working on a new plan with the Federal Communications Commission and other cell phone providers to create a centralized database of stolen phones that would keep them from being activated by any wireless carrier.  That plan could be in place by the end of this year.

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ABC4 reporters return, with cameras running, to the same AT&T store that a day earlier helpfully reactivated a phone that could have been lost or stolen, no questions asked.  (2 minutes)

AT&T is facing a class action lawsuit from customers who allege the wireless giant is profiting handsomely from the stolen smartphone trade.

The suit, filed in California, claims AT&T makes customers purchase new cell phones to replace stolen ones, while allowing the thieves to sell phones to buyers who can walk into any AT&T store and reactivate them with a new SIM card, helpfully supplied by AT&T.

In effect, the lawsuit argues, AT&T is earning new revenue from victims forced to purchase a new phone as well as from the buyers of stolen phones who reactivate as new paying AT&T customers.

A Salt Lake City television station couldn’t believe AT&T was looking the other way when dealing with the pervasive problem of cell phone theft, so they sent reporters undercover with a deactivated iPhone that was reported stolen, and found AT&T employees ready and willing to reactivate the dead phone.

“All you would have to do is pay for the plan, said the unnamed AT&T agent. “We’ll set up your account with your ID and then put the new SIM card in there and put money on it.”

Those victimized by smartphone theft found AT&T agents less helpful, as KTVX reports:

At a second store I tell an agent “I think my phone has been stolen.” Unlike the claims in the lawsuit, this agent at a second store tells me he can suspend the service, but there’s no way to shut the phone down.

The agent said, “If they tried to activate it, we don’t have a way to flag serial numbers on the phone unfortunately.”

So the thief has an activated phone and the victim is left buying a new one for several hundred bucks.

AT&T claims the suit is without merit.  The company also claims it is working with other cell phone providers and Sen. Chuck Schumer (D-NY), to establish a new database of stolen cell phones.  When a smartphone is reported stolen, the forthcoming policy would guarantee the phone could not be reactivated with any participating carrier.

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KTVX reporters go undercover and visit a few Salt Lake City AT&T stores to learn if the phone company is aiding and abetting smartphone thieves.  (2 minutes)

Time Warner Cable's office on Mt. Hope Avenue in Rochester, N.Y.

A major service outage Sunday disrupted cable-TV, phone, and broadband service for a large number of Time Warner Cable customers in the Rochester, N.Y. area.

Starting at around 8am, cable channels started to pixelate and freeze, broadband service began to fail, and calls to and from Time Warner Cable phone customers were, in some cases, disrupted.

Time Warner’s local service number was quickly jammed with calls, and the company placed a recording on that line indicating they were aware of the problem, which later was described as a “router problem.”

Service was finally restored in the mid-afternoon.

Time Warner Cable customers can receive credit for the service outage, but only if customers request it.

Customers can call, chat, or e-mail the cable operator and let them know credit is requested for yesterday’s outage.  A customer service representative will usually respond to e-mail requests within hours, with service credits appearing on the next bill.

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WHAM-TV led Sunday’s evening news with a report about the service outage’s impact on Rochester residents and businesses.  (2 minutes)