Digital Society’s Michael Turk pointed out in recent posts (here and here) that Free Press really missed the boat on TV Everywhere.  Their anti-consumer position on the service to provide cable programming online is at odds with reality.

Now I’d like to demonstrate exactly how it’s at odds with reality.  A version of TV Everywhere, contrary to Free Press’ claims of anti-competitive intent, could quite easily, and very quickly, create competition with all multi-channel video providers.

Netflix as an MVPD

A recent post on the number of Netflix-enabled consumer devices indicates a wide distribution platform for the movie service.  Everything from Xbox 360s and Blu-Ray DVD players to Boxee’s new Box and LG’s new Broadband HDTVs can carry the Netflix streaming platform.

They already have a selection of on demand movie titles available to “Watch Instantly” and just inked a deal for many more from Warner Bros.

Given their platform and their existing subscriber base, the only thing preventing NetFlix from becoming a major player as an MVPD is a deal with programmers.

A TV Everywhere model would provide that capability.

By negotiating a deal with content providers (cable channels) NetFlix could offer its customers a package of cable content for a monthly subscription price.

What Would Such A Package Look Like?

Let’s say NetFlix negotiated content availability on a one-day delay.  Programs would run first on traditional television, thereby protecting content providers air-date advertising revenue. They would be available for NetFlix subscribers to access the next day – like many programs on Hulu today.

Since NetFlix would likely not carry live sports, their package offering would be reduced significantly by not paying per subscriber for ESPN.

Programmers may, given the lack of advertising, request a slightly higher price per subscriber, but because they won’t be live, that incremental cost could be quite small.

Let’s say they offer a substantial package of cable content for $39.95 per subscriber.  That’s on par with or less than cable packages basic offering.  Because customers would also have access to the NetFlix movie offerings, they would have less need for premium cable channels to see films.  In fact, under terms of the Warner Bros deal, NetFlix customers could have access to movies earlier than they would with an HBO subscription.

NetFlix could easily become the only nationwide video provider that also has an Internet offering.  They currently have national distribution across multiple devices, and an Internet site for viewing their “Watch Instantly” content. Cable operators and telephone companies are regional.  Dish and DirecTV are national, but have no Internet play.

TV Everywhere As Competition Enabler

Looking at this very plausible scenario, it is easy to see how TV Everywhere, contrary to Free Press’ assertions, could easily, and in very short order, provide substantial competition to cable.  That’s only one example.  This example is built on an existing business with natural synergies to the TV Everywhere model.

In case this scenario doesn’t seem likely, take a look at Sezmi. Sezmi plans to deliver cable content (negotiated with programmers) to a set-top box you own (no more rentals), and it picks up broadcast signals for free.  When reviewing the service, NewTeeVee pointed out the potential downside.

This [per show] pricing scheme doesn’t do much in the way of making it simpler. Granted, we don’t know how much Sezmi will charge per show, but even if it’s dirt cheap, this a la carte pricing means that people have to monitor how much TV they consume, and won’t know immediately how much their bill will be month to month. If you really wanted a la carte programming, you could just go with an Apple TV and get an HD antenna to receive the networks for free.

Most people who have looked seriously at a la carte have come to exactly the same conclusion – it’s entirely likely to end up costing you more.  But, if you don’t like these two models, just wait.  There will be more new businesses and more new business models enabled by TV Everywhere.

There is no indication that TV Everywhere will thwart competition.  If anything, businesses creating services and products built on TV Everywhere will likely start popping up all over.

What will they look like?  That should be up to the innovators and entrepreneurs, not the busy-bodies and the bureaucrats.