Cable, satellite and telco-TV subscribers around the country can now watch most of the hit shows on Turner’s TBS and TNT Networks for free, assuming two things are true:

1. You pay for a package of television channels from Comcast, DirecTV, Dish Network, Cox Communications, Cablevision Systems, Suddenlink Communications, Verizon FiOS, or AT&T U-verse.
2. You are not a Time Warner Cable subscriber.

The new TV Everywhere app, available for phones and tablets, comes free of charge.  Once authenticated as a legitimate pay television subscriber, users can watch hit series and some older shows from both networks.

Once again, Time Warner customers are on the outside, looking in.  The nation’s second biggest cable operator has not been a TV Everywhere team player, preferring to launch its own live streaming iPad application and steering clear, so far, from on-demand, online viewing from most of its partner networks, including HBO.  Time Warner Cable executives have, in the past, alluded to licensing fees and user authentication complications for not launching TV Everywhere on-demand viewing for its customers, but the company has not explained why it has not signed on for Turner’s app.

TV Everywhere, a concept on the drawing board for almost two years, is an attempt by the pay television industry to lock down online video programming for paying customers, in an effort to slow down “cord cutting” by consumers trying to save money on their cable TV bill.  The concept delivers unlimited access to popular cable programming, but only to those who already pay to subscribe.

Many TV Everywhere projects have been soft-launched without much publicity, but that is not true for Turner’s app.  The network has commissioned several clever advertisements featuring various network stars promoting the app, and now Turner wants to educate consumers about how to use it to watch shows online.

The most complicated part of the process is getting “authenticated” by the application for authorized viewing.  Some cable companies like Time Warner want customers to launch access to TV Everywhere programming from the cable company’s website, where customers have already been authenticated when they sign up for an online account.  Other companies are using customer account numbers, PIN codes, or passwords printed on monthly bills to let customers register directly for access.  When the application matches a customer account number or PIN code, the content becomes accessible.  It is typically a one-time-only hassle, but there have been cases where customers have had to grab a recent bill more than once to re-authenticate themselves.

Not every show will be made available for online viewing.  Many rerun off-network shows shown on TNT and TBS don’t currently include streaming rights.  So while users can watch past episodes of Conan O’Brien, they’re out of luck if they want to watch Friends.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Turner App.flv[/flv]

Watch a selection of spots from the new advertising campaign for Turner’s ‘TV Everywhere’ app.  (4 minutes)

Slingbox PRO-HD

In a shot across the bow to programmers demanding compensation for the cable company’s TV Everywhere project, Time Warner Cable has announced it will give away a free Slingbox PRO-HD device to every customer signing up for its top-tier 50/5Mbps Road Runner ‘Wideband’ broadband service.

The Slingbox, which allows customers to watch live streams of cable television programming and other video over a broadband connection, retails for $300 and that is what Time Warner will rebate to new “Wideband” customers who are willing to pay $99 a month for the fastest possible Internet service from the cable operator.

By handing out a free Slingbox, which customers can use to watch whatever channels they want, Time Warner is sending a message to intransigent programmers, particularly Viacom. which has been particularly hard-nosed in its negotiations for streaming rights of popular Viacom networks like Comedy Central and MTV.  Time Warner found its efforts to stream those networks on its free iPad app stymied when Viacom went to court to stop the streams pending compensation negotiations.

With the Slingbox, customers can bypass messy business debates and watch whatever channels they choose to subscribe to, although Time Warner Cable won’t officially declare that as their intention for the new promotion.

Instead, Jeffrey Hirsch, Time Warner’s executive vice-president and chief marketing officer, claims the Slingbox offer is an attempt to drive subscriptions for its DOCSIS 3-based Wideband service.

“Over time we’re really trying to emphasize Wideband as a mainstream product,” Hirsch told the New York Times.

Currently, only a small percentage of customers subscribe to the company’s 50/5Mbps service, most through Time Warner’s super-premium SignatureHome service, which includes the speedy tier as part of its triple-play bundle of phone, Internet, and cable service.  The company sells SignatureHome in most markets for around $200 a month.

The Slingbox promotion is planned for launch this September.  Customers are expected to pay upfront for the device and receive a $300 prepaid debit card as part of the rebate offer.  No word on whether the promotion will extend to new SignatureHome customers, or only to those choosing Wideband service a-la-carte.

Ironically, Slingbox use promotes a major increase in broadband traffic, thanks to high bandwidth HD streaming video.  Time Warner’s Slingbox promotion will drive increased traffic on their broadband networks once customers start watching shows outside of their home.

Fox has turned off instant access to its network shows effective this afternoon for all but “authenticated” pay television customers.  But with only one partnered provider thus far — Dish Network — that leaves millions on an eight day waiting list.

Fox Network programming on its own website and Hulu is impacted by the new embargo, which means the vast majority will have to wait at least a week for access to new episodes.  Customers paying for Hulu + are not affected by the delay, and the network promises forthcoming partnerships with other cable and satellite providers shortly.

Fox says it’s all a part of “retransmission consent” agreements with pay providers.  Major cable operators don’t want to pay for Fox affiliates and cable networks if the network is willing to give away free access to programs online.  In return for blocking access to “cord-cutters,” cable companies hope to stop consumers from switching off cable television packages.

Viewers who try and access shows are brought to a new authentication page to “unlock” access to programming.  If they can’t because their provider isn’t listed, they can fill out an online form requesting their provider participate in the TV Everywhere project.

Most Fox viewers probably will not encounter the new FoxBlock until late fall.  That’s when new seasons of Glee, House, and The Simpsons get started.

Despite the loss of more than 128,000 video subscribers, Time Warner Cable more than made up the difference with rate increases on equipment, programming, and broadband to score a 23 percent increase in earnings in the second quarter of 2011.  For the period of April-June, Time Warner earned a profit of $420 million, nearly $80 million more than the same quarter last year.

Cable Television

Time Warner CEO Glenn Britt continued to blame the loss of video subscribers on the housing crisis and economy, suggesting the cable operator’s prices have gotten too high for some customers to handle, and they’ve disconnected cable television service as a result.  Britt also continues to downplay the impact of online video allowing for consumer cord-cutting, suggesting instead that increased competition from phone companies and satellite providers are creating a problem online video isn’t.

As a result, Time Warner is refocusing its efforts on marketing packages to three segments it particularly wants to attract — the very well-to-do, the Latino community, and the income-challenged.

Time Warner officials noted that many of their customers have continued to pare back their packages to cushion against the company’s rate increases.  For the last few years, consumers have cut premium movie channels and extra tier add-ons.  Now customers are targeting Time Warner’s DVR service as a route to a lower cable bill.  Many are returning their DVR boxes to save money, or are not keeping the service as a promotion expires.  Time Warner often bundles DVR service into new customer promotions for no additional charge.

For these income-challenged consumers, Time Warner is promising to develop new packages of services at reduced prices.  That likely means the expansion of the company’s “budget tier” — a package of selected basic cable networks, excluding expensive sports programming, currently testing in two markets for around $50 a month.

But the company is also reporting success with its wealthier customers, many who are adopting Time Warner’s super premium Signature Home service, from which the company collects an average of $220 per month per customer.  Time Warner is also ramping up promotion of its cable services to Spanish-speaking audiences in the Latino community — customers it may have under-served in the past.

The company also reported declines in video-on-demand revenue, principally adult pornography pay-per-view content consumers are now watching on the Internet for free.

Broadband

Among the brightest stars for Time Warner Cable continues to be broadband service, which is increasingly important… and profitable for the nation’s second largest cable operator.  With “pricing strength,” Time Warner has successfully adopted a series of rate increases for Road Runner service, increasing revenues along the way.  The company also reports success with its DOCSIS 3 rollouts, now reaching 60 percent of its cable subscribers.  CEO Britt says the cable company expects to complete DOCSIS 3 upgrades nationwide by the end of 2012.  A noticeable percentage of customers are upgrading to premium-priced, faster speed tiers as a result.

Despite the investment in DOCSIS 3, Time Warner Cable continues to slash the amount of capital it is investing in its network.  So far this year, capital expenditures are down 7.4 percent to $1.36 billion.  Chief Operating Officer Rob Marcus predicts Time Warner will spend no more than $3 billion on its systems in 2011, despite plans to continue broadband upgrades and convert their cable systems to all-digital operations.  So far this year, Time Warner has earned over $2.2 billion from its broadband division alone, up 9 percent from last year.  The company attributes most of that growth to rate increases and customers upgrading their service.

Other facts:

• Time Warner’s wireless mobile broadband has failed to spark much interest from consumers, perhaps because they realize it comes from Clearwire, a company Time Warner CEO Glenn Britt seemed unimpressed with in today’s conference call.  He made a point of telling investors the cable company is under no obligation to invest anything else in the venture;
• Time Warner Cable is taking a new interest in Wi-Fi, deploying networks in New York and Los Angeles, in the hope the company can boost interest in a “quad-play” of cable, phone, Internet, and wireless broadband/Wi-Fi that consumers have taken a pass on thus far;
• The company’s new super data center in Charlotte, N.C., will provide a national “head-end” for IPTV video, currently supplied from a facility in Denver.  This will principally benefit iPad users using the company’s app to stream online video.  The company hopes to eliminate regional and local distribution efforts as a cost-savings measure, consolidating national distribution through Colorado and North Carolina;
• The company’s next version of TWCable TV — the aforementioned iPad app, is due out in a few weeks and will include text searching for individual shows.  Whether it corrects the ludicrous inability for the app to consistently stream video is another question;
• Competition for new customers has been responsible for a number of disconnects.  One satellite provider is pitching Time Warner customers on a $30 a month video package that includes the NFL Sunday Ticket for free.  Verizon FiOS has increased its marketing of Time Warner customers, offering its own triple-play package for $99 a month.  AT&T U-verse has their own triple play packages as low as $89 a month, with a substantial mail-in rebate offer good for over $100.  But Britt warns the lack of change in the “average revenue per subscriber”-numbers from competitors probably means consumers are paying substantially more thanks to fine print-surcharges and fees;
• Time Warner is still trying to sign agreements for its TV Everywhere project, particularly for HBO Go, but the terms are evidently still not acceptable to the cable company.

Our earlier coverage, seen below, covers Britt’s remarkable comments about usage-based pricing.  He was certainly off the usual industry playbook today, even going as far as telling investors what we knew all along: bandwidth costs bear almost no relationship to the prices charged for broadband service.  That’s one we’ll tuck away and remember.

Time Warner Cable CEO Glenn Britt highlights the results from the second quarter, covering cable-TV, broadband, and other products. July 28, 2011. (6 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

News Corp.’s Fox television network has announced it will erect a pay wall that will delay access to popular Fox shows for eight days after airing… unless you are an authenticated cable-TV or other pay television subscriber.

The announcement is the first among the major broadcast networks to keep cord-cutters and those who don’t pay for their television entertainment from conveniently watching shows online.  With most Fox shows formerly available for free on Hulu one day after airing, many viewers simply watch programs online, enjoying a reduced number of commercials along the way.

Now, viewers will have to wait a week before those shows become accessible.  Or, they can pay Hulu $7.99 a month for a Hulu+ subscription and watch right away.  Or sign up for cable television.

The pay wall will be introduced Aug. 15 and was constructed at the behest of the nation’s largest cable, phone, and satellite companies to stop consumers from watching shows online for free.  Local Fox stations don’t mind the change either, if it means you will watch your favorite shows on local stations instead of a national website.

Michael Hopkins, Fox’s president of affiliate sales released a statement explaining the change was designed to “enhance the value” of cable, satellite, and telco-TV subscriptions.  Cable companies have been upset about paying retransmission rights fees for Fox’s local affiliate stations, only to see the network give away programming, for free, online.

Hopkins

“We’re concerned that cord-cutting is going to be a problem,” Mike Hopkins, Fox’s president of affiliate sales, said in an interview with the Wall Street Journal. “The more you enable it by putting content out there for free without any tether to a pay-TV subscription, the bigger that danger becomes.”

If Fox is the first broadcast network to erect a pay wall, it likely won’t be the last.  Disney’s ABC is exploring adopting a similar strategy, and CBS had withheld much of its programming from online ventures precisely because it believes it dilutes the value of its shows.  It will likely favor a similar pay television approach.

For consumers, the details of how the pay wall will work could become problematic depending on their pay television provider.  DirecTV is quickly working to keep free access to Fox shows for its subscribers after the pay wall takes effect.  But some cable companies like Time Warner Cable have dragged their feet on TV Everywhere online projects, and subscribers, even with cable TV packages, could still find themselves locked out behind the wall, unless they also have a Hulu+ subscription.

The risk of annoying viewers by keeping them away from their favorite shows could easily spark a renewed interest in piracy.  With a commercial newsgroup account, access to peer-to-peer software or file storage sites like Rapidshare or Megavideo, bypassing the industry’s pay-walls is as easy as finding the shows viewers want to watch, legally or otherwise.