Television as we know it is fading
As Disney streams ABC broadcasts to mobile viewers and a senator pushes for cable unbundling, the business soon won't be the same.
The app, dubbed Watch ABC, will be available first to viewers in New York and Philadelphia. The company expects to bring it to the six other markets where ABC owns TV stations later this summer and is in talks to widen that to 200 more, the newspaper says.
Watch ABC will be available only to subscribers of cable and satellite services. It comes as the networks continue their so far unsuccessful fight to block Aereo, a service backed by mogul Barry Diller that takes broadcast network signals and streams them to consumers without paying retransmission fees to the broadcasters.
Media companies have threatened to convert their networks to cable if Aereo is successful. But that move would probably cost them billions in lost advertising revenue.
Meanwhile, the pay-TV industry has another fight on its hands in Congress. Sen. John McCain, R-Ariz., recently introduced a bill to end the practice of bundling, whereby popular cable channels such as ESPN get packaged with less popular ones such as Shalom TV. His Television Consumer Freedom Act of 2013 also would take away the licenses of any broadcast network that converts to cable.
The cable industry has fought against a la carte pricing for years, arguing that it would drive up costs and harm consumers. Even though McCain's bill stands little chance of passing, some commentators wonder whether media companies may lose the bigger war.
"By turning program bundling into an inside-the-Beltway issue, McCain has given a green light to politically obsessed editorial boards and pundits to take sides," Deadline.com executive editor David Lieberman wrote. "That will present a public relations nightmare over the next few weeks for the Big Media companies that require people to pay for channels that they don't want."
Cable service providers are starting to raise similar arguments. Earlier this year, Cablevision (CVC) filed suit against Viacom (VIA) for bundling its popular channels such as MTV and Comedy Central with less well known offerings such as Tr3s.
It's likely just a matter of time before bundling ends, meaning the current multichannel universe will shrink as customers start paying for only the channels they want. They'll also get to view TV when and where they want as more programs move to their portable devices.
One thing is for sure: The TV business of tomorrow will look nothing like it does today.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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If Congress ever passed legislation disallowing bundling (questionable) they would make the effective date 2 to 3 years into the future thus giving all networks pleanty of time to figure out new ways to screw the consumer before the law went into effect.
Trust me, the networks and subscription TV providers won't stand for losing any money.
If you want proof of this, look no further then your latest credit card statement.
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