CNN Goes Halfway on Streaming

While CNN is not the first cable network to stream its entire 24-hour broadcast on the Web, the move does raise numerous questions about the future of cable on the Internet — and how cable companies program their own Web sites. By requiring authentication, CNN (and ESPN with its own streaming option) is trying to maintain a delicate balance that gives consumers what they want but not to the degree that it messes with the cash cow of carriage fees.

Ever since online video starting blowing up around 2005 (see Tube, You) the TV industry began flooding the Internet with complementary, behind-the-scenes programming — eventually followed by full-length episodes of the most popular shows. But cable news was more cautious. While CNN and its competitors starting putting all sorts of news clips online, they resisted putting full-length episodes of Larry King on the Web or much live footage for that matter. The rationale was simple. CNN’s business model is dependent on MSOs paying fees to carry its networks — as well as TV ad dollars.

Even though CNN, Fox News, ESPN, CNBC and other news networks’ content lent themselves to live streaming on the Web, the thinking in the industry among many was, “they’ll never go there.” That sort of access would freak out their fee-paying cable company partners and fan the flames of cort-cutting, the thinking went.

So CNN started looking for alternatives to program the Web. The company tried the subscription service Pipeline in 2005, a noble attempt that proved that people didn’t want to pay for news video on the Web.

Pipeline morphed into CNN Live, an original, free video product that featured multi-camera views of breaking news events as well as some programming. Meanwhile, CNN.com continued to build its huge 40-million plus unique user audience, while carving out a unique personality from the network.

Momentum has shifted over the past six months or so. First, almost quietly, ESPN put all of its networks in full on the Web — for paying cable subscribers. Then Time Warner and other cable companies launched iPad apps that allowed users to stream much — but not all — of their channel lineups on the tablet devices, leading to Viacom’s ludicrous lawsuit.

An obvious question is why couldn’t they have done this years ago? Was the technology all that complicated to authenticate cable subscribers? Are cable companies going to have a conniption?

Another interesting trend to follow is whether individual networks will lead the cable-to-the-Web change, like CNN and ESPN are. Or will it be the cable MSOs, who may have the most to lose? Maybe Viacom starts offering MTV directly, bypassing Time Warner somehow?

What happens ultimately with advertising on these Web delivered networks? Do TV spots run as usual or could this open up a whole new premium Web video market?

And lastly, what if any impact do live cable networks on the Web have on their sister Web sites?  CNN says that CNN LIve will continue — but does it still have a reason for being?  And once users get accustomed to streaming their favorite news/sports networks online, could they end up visiting their Web sites less?