• The Economist, Tuesday, May 12, 2009 12 PM

Time Warner is getting ready to end one of the most unhappy unions in merger history, as it prepares to spin off former Web giant AOL. However, just as Time Warner moves to end one Internet relationship, it's beginning another, notes The Economist: later this year, the media conglomerate plans to unveil "TV Everywhere," a new scheme for putting Time Warner shows online. The service will allow those who can prove they subscribe to a cable or satellite package that includes Time Warner channels to watch shows online at no extra cost. Rival networks and cable providers have also pledged to participate.

The move, says The Economist, aims to preserve "one of the most dependable rackets in media," as content providers like Time Warner receive carriage fees from cable and satellite companies for the right to sell subscriptions to their content and advertising against it. "These fees are a handy bulwark against shocks to the advertising market, and they tend to go up faster than inflation," the business journal says.

But Time Warner isn't the only company with a scheme to put cable content online. Comcast, for example, America's biggest cable operator, wants subscribers to watch video on its website, Fancast. ESPN also allows certain ISPs to stream its sports events. "An obvious threat, although not a present one, would come if a big video-streaming website started selling subscriptions to television programmes and other professionally produced content," The Economist says. By contrast, TV Everywhere "aims to preserve its essential architecture" of the cable and satellite business.

Read the whole story at The Economist »