Time Warner Cable Inc. (TWC) subscribers will soon be able to watch shows from the Discovery Channel or Animal Planet online, including on tablets or smartphones, thanks to a ground-breaking deal unveiled Monday.
The agreement with Time Warner Cable is the first time the channels' owner, Discovery Communications Inc. (DISCA, DISCB, DISCK), has agreed to make its shows broadly available for pay TV subscribers to stream online, four years after major TV companies began embracing the idea.
TV executives see online availability of pay TV programming, known in the industry as TV Everywhere, as a way of improving the value of pay television and reducing the incentive for consumers to disconnect in favor of cheaper online video options.
Discovery had been slow to make deals with distributors that included these rights previously because its executives had said they wanted to wait for better measurement of viewership on mobile devices, and ensure that they would be fairly compensated for any such deals they might make.
In October, Nielsen announced that it would augment its TV ratings data with tablet and smartphone viewing data beginning next fall. In a call with analysts later that month, Discovery Communications Chief Executive David Zaslav noted that measurement improvements were coming "pretty quickly" for tablets, leaving price as the main sticking point.
"Our position is that right now the cable operator only has the right to carry our channels through the TV set," Mr. Zaslav said. "And giving that playability to the consumer is a real benefit to the cable operator. And so for us, right now we are just at this little bit of an impasse on value."
That impasse was resolved by Time Warner Cable increasing the amount it paid Discovery to carry its channels, according to people familiar with the matter. Time Warner Cable struck the deal as part of a broader renewal of its distribution agreement with Discovery.
Discovery owns an array of channels focused mostly in nonfiction programming, including TLC, Science and Military Channel, as well as OWN, a joint venture with Oprah Winfrey.
Discovery previously did a trial TV Everywhere deal with Comcast, making Discovery Channel available on Comcast Corp.'s (CMCSA, CMCSK) Xfinity streaming platform. But the Time Warner Cable agreement represents Discovery's first deal across its full portfolio of channels. The streaming capabilities will go into effect next year across all platforms, according to a Discovery spokeswoman. It isn't yet known whether Discovery will roll out its own mobile apps or make its content available through Time Warner Cable's app.
Although all major network groups have now at least begun to sign TV Everywhere deals, the TV Everywhere landscape remains highly fragmented, as not every pay-TV distributor has deals with every network for streaming rights. Further complicating the picture, while some cable operators, like Comcast, have invested heavily in their online portals for piping cable programming to subscribers, others have lagged behind. Cable and media executives alike have bemoaned the ad hoc experience for consumers today, which exists as a sea of apps that require customers to remember cable usernames and passwords.
-Shalini Ramachandran contributed to this article.
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(END) Dow Jones Newswires
November 18, 2013 15:25 ET (20:25 GMT)Copyright (c) 2013 Dow Jones & Company, Inc.
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