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Free vs. Premium and IP Video vs. IPTV

Comcast CBS on demand online

The Web is abuzz today with the news that 17 cable networks and CBS have joined Comcast’s On Demand Online trial. The news is excellent, but more to the point, it serves to emphasize the distinction between Internet video and TV delivered over an IP platform. The first is a potential threat to existing pay-TV operators. The second is an operator advantage.

Comcast’s online video portal, at first glance, looks like any other over-the-top video site, but there’s one serious difference. Comcast has started to make the distinction between free and premium content. Sure you can get basic content (and, blessedly, a lot of it) for free on Hulu (or Fancast, for that matter), just as you have always been able to get the major networks for free through OTA broadcasting. Comcast, however, is taking the model that has worked so well for cable for years to the online world. If you want premium TV, you have to pay for it with your cable subscription.

The IP platform is not a threat to cable and telco TV providers, but an asset. Operators own the broadband pipes and control massive content distribution deals – something that puts them way out ahead of any independent online video provider. And online portals are only one step in the evolution of IPTV. AT&T and Verizon are already using IP to deliver TV to the TV set, and cable also has living-room IPTV in it sites. These operators have the luxury of connecting online video content to the premium content they’ve already secured. And on top of that, they can ensure the best possible delivery of that content, whether it’s to a PC or, ultimately, to the living-room flat screen.

Online video is a tremendous asset for consumers, and it has certainly upped the ante for free content. But there will always be a premium TV service. Cable and telco providers know this, and are ready to take advantage. The good news for consumers? The new world of IPTV, while not free, will include time shifting, place shifting, interactive apps, info widgets, and much, much more.