The news that came out last week continued an interesting question: why would a cable company want to expand its free Wi-Fi services? Could it be that a big cableco sees free Wi-Fi as a way to keep its current cable customers — by making sure they can watch sports content wherever and whenever they want?
Nobody knows for sure yet, but in all the numerous news reports of the recent deal between cable giant Time-Warner Cable and Wi-Fi aggregator startup WeFi, there were a lot of details on the what but hardly any on the why.
Like other cablecos, TWC has been moving forward aggressively with a Wi-Fi hotspot deployment. By tapping WeFi’s capability to help people find free hotspots, TWC is buying rather than building, taking advantage of the idea that private networks may get built out farther and faster than even the biggest service providers could manage. But the question still lingers — why?
GigaOM’s Kevin Fitchard in the story linked above touches a bit on an idea — he quotes a WeFi exec’s idea that “cable providers want to encourage their customers to access their broadband connections and video programming outside of the home, making those services that much stickier.” But I don’t think it’s just about the sticky. I think it’s about maximizing the access to the content that is king over all other types, namely live sports content.
Sports remains the far and away No. 1 reason people watch TVs — just go find a list of the top viewed programs ever. Or check out stats from this summer’s Olympics. And a lot of that viewing is going to move to mobile screens, like tablets. So why is TWC putting Wi-Fi hotspots on the beaches of Southern California? Surprise, surprise, TWC last year paid $3 billion to snag the rights to L.A. Lakers basketball games. So now Lakers fans who are TWC subscribers can watch the games while they’re on the sand. But most importantly to TWC — they won’t cancel their cable subscriptions, meaning that TWC doesn’t have to shell out the $500 or so that is the estimated cost of finding a new subscriber.
Since it’s LA those subscribers may also be watching things like Dancing With the Stars or American Idol, but don’t kid yourself — you don’t see anyone ponying up billions in just rights fees for reality shows. And people don’t cancel cable subscriptions or buy pricey ones just to watch those shows. They do for sports, and I’m betting that cable’s big move to provide free Wi-Fi is all about making sure sports fans can watch the content they’ve already paid for — instead of, say, paying Verizon $5 extra a month to watch NFL games on your phone.
Here’s the news coverage of the TWC/WeFi deal:
Jeff Baumgartner at Light Reading —
Todd Spangler at Multichannel News —
Kevin Fitchard at GigaOM —
And the LA Times story about sports rights, also a good read: Joe Flint and Meg James, LA Times (HT to Spangler’s Twitter feed for the link)
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