The dangers of media ownership concentration

You have probably read about the on-going battle between Cablevision and Fox over the fees to be paid by Cablevision to carry Fox programming in the Cablevision service area.  The resulting stand-off between the two companies resulted in Fox programming being blocked from Cablevision customers.

But for Fox that apparently was not enough. Yesterday, Fox (News Corp.) blocked all access for Cablevision Internet subscribers to fox.com and all Fox programming on Hulu.

Here’s a screenshot from Fortune.com columnist Seth Weintraub, taken this afternoon when he tried to watch a Fox show on the site, which is co-owned by News Corp., Disney’s ABC and GE’s NBC Universal:

News Corp.’s comment, via Fox Networks PR guy Scott Grogin: “Fox.com and Fox content on hulu is unavailable to Cablevision subscribers.”

Reportedly, the blockage has been or is being dropped by News Corp. We’ll see.

Ladies and gentlemen, here is Exhibit A showing the dangers of concentrated media ownership. When Internet access can be curtailed at the whim of a private company in order to protect its television monopoly we have crossed a line. Think about what could happen with Comcast’s acquisition of NBC Universal.  Supposed that the combined company offered free access to NBC programming t0 Internet subscribers of other cable companies, but blocked internet-based access to Comcast’s own customers in order to induce them to not drop cable TV subscriptions. It could happen, as described here on GigaOm:

The Comcast/NBCU merger is aimed right at competition — avoiding any series of steps that might result in having dumb (but big) pipes serving the areas where Comcast now has dominion, and avoiding having Comcast’s pipe itself made dumb. If the merger goes through as Comcast proposes, the new NBCU will have the power in Comcast’s market areas (where it routinely has a 60 percent-plus share of local pay-TV customers) to raise other pay-TV providers’ (satellite, small cable, telephone, nascent online distributors) costs of doing business substantially.

This will mean, among other things, that competing aggregators of online video who don’t have reasonable access to crucial NBCU content (particularly sports) won’t have the power to constrain Comcast’s prices. Comcast ties access to online video content it controls to a cable subscription, and Time Warner does the same thing with its content. Many of the other pay TV providers will cooperate in this plan, which goes by the nickname “TV Everywhere”. This means that independent online aggregators don’t stand a chance — because consumers will be used to getting highly-branded online video for “free” as part of their bundle from their ISP, they won’t be willing to pay for an independent service.

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Imagine a big pipe coming into everyone’s house in a given market area controlled by one actor. Now imagine that you want to aim an online business – particularly an online video business – at that area. You’ll be subject to the whims of the carrier, and there will be no countervailing force to protect your ability to reach your customers. Maybe a small portion of that pipe will be reserved for traditional Internet access, but maybe not, and what’s reserved won’t be very fast or very standardized.