Sen. Herb Kohl irked at how NBC is offering Olympics online
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Senator Herb Kohl (D-Wis) is not a fan of how NBC is offering Winter Olympics coverage online.
In a letter to NBC Universal Chief Executive Jeff Zucker, Kohl wrote that it ‘appears that NBC is restricting access to much of that content to only those viewers and Olympic fans who subscribe to cable, satellite, or other pay television services with whom NBC has partnered.’
NBC is requiring people to prove that they are cable or satellite TV subscribers in order to view much of its Olympics content online. About 90% of the country subscribes to some form of cable or satellite television.
Kohl, who is chairman of the Senate Antitrust Subcommittee, did not say he is against NBC offering content online for pay, but he does wonder why NBC can’t just charge for people to watch online if they do not already subscribe to a cable or satellite service.
‘NBC’s decision also raises questions as to why NBC requires consumers to have pay TV subscriptions in order to access Olympic coverage on-line, rather than offering viewers the opportunity to purchase this select Internet content and in order to collect revenues directly,’ he wrote.
Kohl has just hit on one of the big issues facing the content companies and their distributors (cable, satellite and telephone companies). The reason NBC doesn’t just offer up Olympics for pay online for everyone is that would greatly upset the distribution companies that pay NBC money and other forms of compensation to carry their cable channels and their local television stations. The big fear of distributors is that as more content goes online, consumers will disconnect from their cable or satellite service.
NBC Universal is in the process of merging with Comcast Corp., the nation’s largest cable and broadband provider, and Kohl said he wonders if the network’s online strategy with the Olympics is ‘a harbinger of things to come’ and added that, ‘it is our view that video over the Internet has the potential to become a significant competitive alternative to traditional pay TV subscriptions, and it appears that policies such as the one described in this letter may have the effect of limiting the prospects of such competition.’
-- Joe Flint