In the latest conflict, Walt Disney-owned ESPN has pulled the plug on negotiations with cable operator Charter Communications to run ESPNews on its cable TV network. The disagreement centred on Charter's proposed limits on how much ESPNews programming could be streamed via the Net, causing ESPN to balk at the terms and yank its programming from 1.2 million Charter-linked homes, effective June 30.
The imbroglio marks the latest example of the rising importance of Net distribution rights, which are being viewed as a source of revenue and a tool for building a brand. As a result, TV programmers are increasingly injecting complex and unique Net issues into contract negotiations.
At the same time, cable operators are attempting to rein in rights to that content, often out of fear that broad online distribution of content could cut into their business. The relationship between the cable operators and content owners is equally important, as programming can serve to promote high-speed Internet access via cable.
"We're in this transition period right now because we're shifting from a world where broadcast and Internet rights were bundled together to one where they're parsed out and sold as separate entities," said Mark Mooradian, senior analyst at research company Jupiter Media Metrix. "There's a lot of new ground people are treading on and a lot of uncertainty."
Charter's proposed boundaries on streaming video are part of an entrenched territorial culture among cable operators intent on protecting their businesses. They have long been fearful that as the Internet grows, consumers will visit the Web to watch their favourite programming.
For example, since Excite@Home went public in 1997, the company has limited the length of "broadcast quality" video people can download. The 10-minute limit applies only to streaming video delivered at a rate of 30 frames per second--the same quality used by TV stations and cable programmers.
Time Warner, whose cable TV network reaches 12.8 million households, has also included language in its contracts for the last three years that limits the amount of video that can be streamed online.
