Only authenticated subs retain next-day viewing
For viewers, easy access to Fox shows online just got a little less easy.
Fox Broadcasting Co. will impose an eight-day delay on TV episodes it previously made available 24 hours after their initial broadcast on the network’s website and Hulu.com unless the viewer is a subscriber to a participating multichannel distributor.
Dish Network is the first partner that will provide an authentication window for cable and satellite subs, requiring them to provide proof of their subscription to watch in the next-day window. The new plan goes into effect Aug. 15, about a month before the new fall season.
The move, announced by Fox on Tuesday, was widely expected given the pressure that broadcasters — three of which are controlled by parent companies with an ownership stake in Hulu — have been under to erect higher barriers to watching TV programs online given the retransmission-consent fees they have begun to collect from distributors.
Placing an authentication window on Hulu could have consequences for its proposed sale given that the website has built up tremendous traffic by providing next-day access to primetime programs from the broadcasters.
No other broadcaster with an ownership stake in Hulu, which includes the parent companies of NBC and ABC, have made similar announcements. And no other cable or satellite provider is onboard yet besides Dish, which counts 14.2 million subs.
The plan will not impact Hulu Plus subscribers, who pay a separate monthly fee to get access to programming. It also technically extends only to shows manufactured by production companies within News Corp., though Fox series “House,” from Universal Media Studios, already has an eight-day delay in place.
The newly imposed delay will delight many in Hollywood who feared that conditioning TV fans to a free “catch-up” mechanism for watching the primetime shows they might have missed was eroding viewership in the on-air window where eyeballs are most effectively monetized. “Modern Family” exec producer Steve Levitan was publicly vocal on this subject last year, likening Hulu to an “empty jukebox” without broadcast content.
How prospective buyers for Hulu, which was put on the block earlier this month, will react to the eight-day delay is unclear given that they were probably apprised of the move during negotiations. Among the companies said to be kicking the tires of the venture include Google, Apple and Yahoo. Netflix indicated Monday it had no plans to bid.
Fox’s move will also be cheered by investors for distributors trying to fight perceptions that its so-called TV Everywhere initiatives aren’t aggressive enough. Fears of cord-cutting were kicked up earlier this week by a new study from SNL Kagan indicating 10% of subs could opt out of their plans by 2015.
Figuring out the proper timing of the windowing scheme governing the airwaves-to-digital transition of TV shows has been elusive. The eight-day delay could open up Fox to criticism that keeping more viewers from quick access to an episode will increase consumption of pirated content.
While making the waiting time from on air to online eight times as long will seem draconian to many consumers accustomed to easy access to shows they missed, it’s still a far cry from the 30-day period that keeps most cable programming offline — a reflection of the carriage agreements that protect their exclusivity.
Broadcast shows weren’t as encumbered because their sources didn’t traditionally get the subscriber fees that cable channels received in addition to the advertising revenues broadcasters once subsisted on alone. That Fox is leading the charge among the broadcasters to authentication isn’t too surprising given its aggressive stance on reaping retrans revenues.
No doubt the network will please its affiliates with the new eight-day plan. Local stations could use some relief: They have been engaged in a bruising battle with Fox, which has sought a slice of their retrans fees and severed the affiliations of those stations with which it couldn’t come to terms.
Fox’s affiliate board was apprised of the authentication strategy, according to a network rep.