For the past several years, broadcasters have been pushing cable and satellite operators to pay more to carry broadcast programming that can also be received over the air with a digital antenna. Because most people now get broadcast stations through subscription services, the cable and satellite operators have been grudgingly paying for the retransmission rights.
Such fees have become an increasingly lucrative revenue stream that makes free over-the-air TV more closely resemble cable channels that require paid subscriptions.
But broadcasters find they now must justify those payments. One way is to limit access to their shows for free online, just as Time Warner Inc.'s HBO and other cable channels limit access to their programs on the Web. Access requires passwords tied to cable subscriptions. Baine and Greenfield said broadcasters would likely move to this "walled garden" approach as well.
Time Warner is pursuing such a model, called "TV Everywhere." It would allow paying TV customers to watch shows from its channels including TNT and TBS online after proving their identity. In a similar move, Time Warner Cable Inc., the nation's second-largest cable TV provider, announced Friday that subscribers who pay for plans that include ESPN would also get access to live sports shows online through ESPN3.com starting Monday. Video on that site is restricted to customers of participating subscription TV providers.
Separately, broadcasters are selling their shows online for as little as 99 cents through places such as Apple Inc.'s iTunes store and on Amazon.com — another method that ensures they get paid.
Collins Stewart analyst Thomas Eagan said Fox's inability to exactly target customers that relied on Cablevision for both video and Internet access could prompt it to simply withdraw some programs from the Web altogether. "At the end of the day, you're more likely to end up seeing content companies changing what they make available for free online," he said.
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