Time Warner Cable Online Video Test En Route
Time Warner (NYSE: TWX) Cable is on the verge of expanding its online video efforts from a small-scale HBO trial to a small-scale national test of its version of TV Everywhere with some of the same networks involved in Comcast (NSDQ: CMCSA) On Demand.
Context & Ripple Effects
Time Warner Cable's move out of the HBO-only trial and toward a small-scale national test completes an arc that began when CEO Jeff Bewkes laid out the TV Everywhere concept in March 2009: cable content stays behind a pay wall online, unlocked by proving you already subscribe. Comcast moved first in April with Fancast.com streaming for its own subscribers, and both companies' tests now draw on the same pool of participating networks — meaning the two largest US cable operators are converging on a shared authentication model rather than competing formats.
The significance is strategic timing: this lands months after Time Warner's board approved the AOL spinoff (May 2009) and after the company abandoned its metered-billing experiments, leaving authenticated premium video as the centerpiece of how cable justifies the bundle against free, ad-supported online TV.
First-order effects
- Subscribers to the participating networks get authenticated access to shows online at no extra charge during the test, while Time Warner Cable gains real-world data on whether verified streaming reduces churn or cannibalizes the linear bundle.
- Networks in both the Comcast and Time Warner tests now have parallel deployments with the two biggest distributors, letting programmers compare uptake before committing to wider rollout terms.
Second-order effects
- Smaller cable operators face pressure to adopt whatever authentication standard Comcast and Time Warner settle on, since programmers will favor the model that reaches the most subscribers through one integration.
- Free, ad-supported online TV services lose negotiating leverage: Bewkes has framed TV Everywhere explicitly as a way to end free full-episode streaming, so networks testing authenticated access have less reason to keep giving content away unauthenticated.
Third-order effects
- If the dual-operator pattern holds, subscriber credentials become the tollbooth for premium online video — shifting the industry's center of gravity from the set-top box to whoever verifies identity across devices.
- Programmers would then face a structural fork between authenticated pay-wall distribution and open ad-supported streaming, a split that determines whether the internet becomes a cable extension or a rival channel.
The trend: Cable distributors are converting the open web into an extension of the paid bundle, with subscriber-authentication standards — not devices or codecs — becoming the competitive battleground for premium online video.