Why Fox Is Imposing 8-Day Authentication Window Online Despite the Fact 100 Million US Households Can't (Yet) Authenticate
Bill Niemeyer, Senior Analyst
July 29, 2011
Fox Broadcasting this week announced a "New Window for Free Streaming of Network Programming". An executive summary for consumers - you're not going to like it.
Starting August 15, "…video distributors that participate in the company’s online authentication service will have an exclusive 8-day window for new episodes of FOX programs." As of now, the participating distributors consist of DISH and the Hulu Plus subscription service. In other words, as of August 15th, about 100 million US households will have to wait eight days after initial broadcast to view FOX shows online.
Why is FOX doing this despite the current exclusion of 100 million households that are legal consumers of FOX Network?
FOX is thinking longer term - about money (that's their job) - specifically, retransmission fees paid by MVPDs for the right to show FOX Network TV stations. Cable networks have long charged carriage fees to MVPDs. Now broadcast networks and their TV station affiliates are asking for and getting retransmission fees.
Privately, it's been long acknowledged by network execs that these fees will eventually lead to restrictions on broadcast content online similar to the tight restrictions on cable network content. The FOX authentication window is the first example of this, but it's likely similar restrictions will appear in the next 12 months for shows from the other three broadcast majors, as they also continue to pursue retransmission revenue.
For OTT users, this trend will cut off next day on-demand access to a large legal source of free popular online TV shows. Broadcast networks, despite the long-term shift of viewing to cable networks, still represent 40% of US household primetime TV viewing. Cord cutters will have to subscribe to Hulu Plus, buy shows on iTunes (or the like), or resort to a combination of over-the-air reception and a standalone DVR. Unfortunately, some may turn to pirated content sources.
At least for now, the FOX windowing strategy also means that about 85 million paying subscribers of MVPDs will not have access to next-day online shows. As FOX itself notes, "The FOX.com team understands that this change to our site might be frustrating." (You think?) A limited number of MVPD subs may be able to find their FOX shows on VOD. Other subs can record them on their DVR (with its potential for ad skipping). Otherwise, they will turn to OTT services like Hulu Plus.
And what may be particularly galling to all consumers is FOX’s decision of an eight-day window. This means that "catch up" (watching a show you've missed before you watch the new show live) becomes almost impossible.
How soon before relief comes for those 85 million MVPD subs? Based on TV Everywhere's “creeping forward” pace towards wide-scale authenticated access to cable network shows on demand online, probably not very soon.
The competitive positioning of both the networks and the operators relative to online video are understandable considering the building tsunami of OTT devices coming to US homes and the large amount of dollars at stake in TV. However, what is less understandable is the willingness to create experiences for consumers that are (to use FOX's word) "frustrating." It shouldn't be news to anyone that consumers increasingly demand (and receive) their choice in the when, where, and how of media access. It also shouldn't be news that TV media companies and operators should be quickly moving forward cooperatively, rather than putting consumers in a squeeze between their respective agendas.
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