Now that the recession is really hitting home, more and more people are cutting back on luxuries. Cand satellite subscriptions are right at the top of things to look at either downsizing or stopping altogether.

With streaming TV shows available over the Internet from various entertainment Websites and many for free, cable companies are very sensitive to this situation and are having to adapt. And what better way than to offer streaming TV for free themselves?

However there is a catch. You have to stay as a paying monthly subscriber and you can watch the premium TV shows online as well as on your TV set, anytime you want and for no additional cost.

The biggest cable company Comcast, will be launching such a service this year. Calling it ‘OnDemand Online’ and giving existing subscribers online content on demand.

However can they convince the public to pay for something that they can pretty much get for free?

Comcast, and every other cable, satellite the TV networks are all jumping aboard the online TV bandwagon because it is the future and noone wants to be left behind.

Research has shown that over a third of adults connected to the net say they watch video online at least weekly this year, up from 25% only two years ago. And the figure keeps growing

The cable operators pay $22 billion a year for shows, and that value is devalued every time someone cancels a subscription to watch TV free online .

The TV networks are also panicking because their programs will be made available on illegal sites online which they cannot get shut down.

So the major cable operators have been quietly negotiating this year with network owners, including Viacom, Time Warner, Discovery, NBC-Universal and News Corp.

Cable operators do not want to pay more to put shows online, whilst network owners see online as an additional revenue stream. Although currently, no deals have been revealed.

Comcast is not giving up on cable TV though. Spokesman David Watson said:- “I think there are multiple ways of delivering the experience we want to deliver.”

But when network programmers offer the same programs free online that Comcast pays $6 billion a year to show, cable’s business model is endangered.

One example is the famous Hulu, owned by NBC-Universal and News Corp. Hulu has become the website to watch streaming free TV and movies online . It is supported by ads embedded in the shows, as on regular TV.

Comcast has its own version of Hulu called Fancast.com. The Los Angeles company even partners with Hulu on some programs.

Fancast expects to be the face of Comcast’s OnDemand Online, said senior vice president Karin Gilford. Anyone can use the site to watch shows, but technicians are working on ways to identify Comcast subscribers who would get special access to programs not available to nonsubscribers.

The site already offers a lot of cable shows, but Gilford dreams of offering smashes not currently online, like “American Idol.” Fancast could dress up a show like that with social media that let viewers chat online while they watch, she said.

“What you’re seeing is the tip of the iceberg,” Gilford said.

One question that has not been answered is whether the online programs that are offered free to cable subscribers will be available for non subscribers to purchase, said Ben Scott, policy director for Free Press, an open Internet advocacy group in Washington.

As long as non subscribers can buy the same programming, the group has no problems with the cable companies, he commented.

Few people expect cable will get exclusive rights to online programming, though.

“That would be a very hard thing to negotiate. The network owners would literally want your right arm and your firstborn for that,” said Mukul Krishna, global director for digital media research for business consulting firm Frost and Sullivan.

So what is stopping the networks from just selling all their programming online without cable?

That $22 billion they get from cable, Krishna said. Cable operators will balk at paying that much if the networks push too hard, killing the goose that lays the golden eggs, he said.

“There’s this delicate dance that everyone’s doing,” Krishna said.

“It is not a choice to offer programming online anymore,” said Louisa Ha, acting chairman of the Department of Telecommunications at Bowling Green State University in Bowling Green, Ohio. “They would not want to lose their audience.”

The sensible solution and only real workable one though is for the Cable companies to offer online TV and slash the subscription charges as well. Otherwise the free and relatively low cost online services will kill them off.

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