Just where is the line crossed for a cable operator between keeping advertising customers happy and keeping viewers happy. We think that Time Warner Cable may well find out that answer with the introduction of a new service called Look Back, which on the surface of it looks like catch up TV, but which is really a way of getting more advertising revenue.
In effect it is a ‘same day’ networked PVR, which looks like a compromise between various broadcasting networks and TWC so that it doesn’t really constitute VoD service, and the sop to the broadcasters is the fact that adverts cannot be fast forwarded. The program ceases to be available after midnight, which gives TWC a mega-cheap DVR, compared to say selling TiVo boxes, but at the same time doesn’t crimp any catch up TV offerings on the web that broadcaster are offering which usually keep the same show available for one or two weeks.
TWC began experimenting with this type of thing back in 2005, about the same time that Cablevision posited the use of a nPVR under the direct control of the customer. But unlike TWC, Cablevision pushed that idea despite the protestations of the cable networks, and ended up losing a legal action over it, one it plans to take to appeal. TWC took the other route, that of co-operating with cable networks and preserving their advertising revenues, offering something called Start Over, which meant that a program could be re-started at any stage during its initial broadcast, even during the last minutes of play .
This new Look Back system is a direct descendant of ‘Start over,’ extending the catch up window until the end of the day, and will have involved, once again, going back to each of the channels and negotiating the rights.
Our view is that this is not an innovation that the rest of cable, nor IPTV, will copy, and that it is a pure TWC experiment that we think will not work. We noted a few weeks back the introduction of TVs that have flash memory built into them so that a ‘pause TV’ system can be created under $40 on the purchase price. This allows fast forward through advertising and is far more likely to take off when introduced by TV makers next year.
TWC will introduce Look Back during October in South Carolina and if it works out will then gradually introduce it around the US, as it is still doing with Start Over. One of the critical steps for TWC and both Look Back and Start Over, is that Nielsen, the unofficial US monopoly on measuring advertising, will have to issue figures that count Look Back as live broadcast viewing, otherwise those advertising impression will not count. If Nielsen Media goes along with that, and it has a significant effect on ad revenues, then some of the other cable operators might look to introduce it, despite the problems it throws up for viewers.