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5 Things Holding Back TV Everywhere's Rollout
It has been almost 3 years since the term "TV Everywhere" burst onto the scene as the pay-TV industry's response to threats from over-the-top competitors. Yet while TV Everywhere is as tantalizing as ever, it remains a vaguely defined concept and a mishmash of disparate efforts. On the positive side, efforts like HBO GO, WatchESPN, various Turner apps, Comcast's Xfinity TV app and others are already gaining traction and illustrating how valuable TV Everywhere services can be.
However, there's still no consensus in the industry about what TV Everywhere really is meant to be - a new way of viewing programming in-home or out-of-home or both? A new delivery mechanism for live/linear channels or for on-demand archives only or for both? A value-added opportunity to retain subscribers or a new way to generate incremental revenue with additional fees and/or with conventional TV-style ad loads? And so on. Talking to executives throughout the industry and following all of the media coverage I'd suggest there are at least 5 things that are currently holding back TV Everywhere from achieving its full potential:
Categories: Cable Networks, TV Everywhere
Topics: TV Everywhere
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As Viacom-Google Appeal Begins, Question Remains Why Can't They Make a Deal?
Remember Viacom's $1 billion copyright infringement suit against YouTube initiated 4 1/2 years ago, which was decided in Google's favor last June? Well, it's alive and well, and this morning the parties will appear for short oral arguments in the U.S. Court of Appeals for the Second Circuit in New York, as Viacom begins its appeal of the decision. Of course Viacom has every right to keep pursuing the matter, but what I've wondered about from the beginning of this case is why haven't the parties been able to make a mutually beneficial business deal so that they can put the litigation aside. As the online video market has matured over the past 4 1/2 years, with the potential dollars up for grabs growing, it's become an even bigger mystery to me.
Categories: Aggregators, Cable Networks
Topics: Google, Viacom, YouTube
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Inside Starz's Netflix Quandary
Here's a thought experiment: Imagine you're running a major cable TV network and your fastest-growing distributor (and largest, by number of subscribers) offers to license your content for approximately $300 million each year, a sum that is about 10 times the amount it has been paying under the current deal struck less than 3 years ago. The new deal would have a very material impact on your P&L as your company's operating income last year was about $400 million. Seems like a pretty tough offer to turn down, right?
However, there are certain catches. First, this distributor is considered a disruptive competitor by all of your other long-time distributors (who collectively paid you about $1.3 billion last year). If you proceed with this new deal, you're concerned that these other distributors may retaliate by paying you less when they renew their deals in the future. Second, this distributor wants a degree of exclusivity that limits your ability to make incremental deals with companies it deems as competitive. Third, key suppliers of your content have escalation clauses that entitle them to incremental payments if you proceed with this new deal, which would in turn erode your margins. And last, but not least, the manner in which this distributor wants to compensate you would alter the way you are positioned in the market - from a "premium" to a "basic" channel - consequently risking a perception that your content will be irreparably devalued by consumers and other distributors.
Got all that? If so, then you grasp the quandary that Starz's executive team found itself in as it evaluated a huge license renewal offer from Netflix. Last Thursday Starz announced its decision, choosing to rebuff Netflix's rich offer, at least for now. But as the math below shows, combined with what I've learned from individuals familiar with Starz's economics, Netflix's putative $300 million/year offer was far more than Starz could generate otherwise, making its decision to walk away all the more difficult.
Categories: Aggregators, Cable Networks
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Expensive Regional Sports Networks Are Becoming Pay-TV's Achilles Heel
An article in the NY Times over the weekend, "Regional Sports Networks Show the Money," highlighted the mega-profitable and symbiotic relationship between marquee sports teams/conferences and the regional sports networks (RSNs) they have spawned. RSNs aren't new, but as the article pointed out, teams and conferences are getting increasingly creative and aggressive about their TV rights, in turn driving up the fees pay-TV operators and ultimately subscribers are required to pay. All of this suggests that RSNs are becoming pay-TV's Achilles Heel especially when it comes to non-sports fans.
This is a topic I covered back in January, in "Not a Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year" and subsequently in "Time Warner Cable-LA Lakers Deal Is More Bad News For Pay-TV's Non-Sports Fans," in each case noting that as sports programming fees drive pay-TV rates ever higher, some portion of non-sports fans will eventually defect for lower-cost entertainment-centric options (e.g. Netflix, Hulu, over-the-air/ antenna reception, etc.).
Categories: Cable Networks, Cable TV Operators, Satellite, Sports, Telcos
Topics: LA Dodgers, LA Lakers, Pac-12, RSNs
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Turner Sports Tees Up Online/Mobile Video Coverage of PGA Championship
The 93rd PGA Championship, the final major tournament of the season, gets underway tomorrow and Turner Sports, which has exclusive broadcast rights, has teed up significant multi-screen and social media initiatives. As the Olympics, NCAA March Madness and other high-profile sporting events have previously shown, online and mobile video have created an immersive, up-to-the-minute experience for fans.
Aside from its Thursday-Sunday live broadcasting schedule on TNT, Turner Sports has a full slate of online video coverage on PGA.com, which Turner powers and through mobile. Among the highlights:
Categories: Cable Networks, Devices, Mobile Video, Sports
Topics: PGA, TNT, Turner Sports
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Viacom is Bullish on Digital Distribution Opportunities
Add Viacom to the list of established media companies benefiting from digital distribution. In its fiscal Q3 earnings call today, Viacom wouldn't break out specific digital distribution revenue but noted that it is "significant" and will contribute to "high single to low double-digit revenue growth per year for the foreseeable future." BTIG's Rich Greenfield estimated digital revenue in the quarter was $70 million, which Viacom executives didn't comment on. Viacom sees multiple drivers for digital growth: an increasing number of digital distributors, international expansion and strong demand for Viacom's content in particular, which skews younger and is geared to digital users.
Categories: Aggregators, Cable Networks
Topics: Viacom
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ESPN3.com Attracted A Record 548,000 Unique Viewers for Women's World Cup Final
ESPN3.com attracted 548,000 unique viewers on Sunday afternoon for the USA-Japan Women's World Cup Finals, the highest the network has received
for a women's sporting event, and the 8th-highest of all events streamed on ESPN3.com. Total viewing time on ESPN3.com, ESPNnetworks.com and the mobile WatchESPN app was 38.6 million minutes, or an average of just over 70 minutes per unique viewer. The iPad was the most popular device for using the WatchESPN mobile app, with 38 minutes average time spent viewing.
Categories: Cable Networks, Devices, Mobile Video
Topics: ESPN
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Cable Flexes Its Muscles (Again) With ESPN's Wimbledon Win
Score another sports programming victory for cable, as ESPN announced today that it has acquired all of the U.S. TV rights to Wimbledon tennis in a12-year deal beginning in 2012. ESPN's win was NBC's loss, as the broadcast network's 43-year association with the tournament comes to an end.
For ESPN, and for cable TV networks in general, it is another step in a steady progression of using their economic supremacy over broadcasters to obtain television rights to marquee sporting events. While ESPN is the undisputed leader, numerous other cable networks like TNT, USA, Versus, Golf and of course the regional sports networks (RSNs) such as Comcast SportsNet and Fox Sports Net have staked their claim to early round or full coverage of high-profile sports events.
Categories: Broadcasters, Cable Networks, Cable TV Operators
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VideoNuze Report Podcast #102 - HBO GO's Opportunities - July 1, 2011
Daisy Whitney and I are pleased to present the 102nd edition of the VideoNuze Report podcast, for July 1, 2011.
In this week's podcast, Daisy and I discuss HBO GO, the online/mobile service from HBO. As I said in my review yesterday, I'm very impressed with HBO GO, and believe it is a strong new asset for the company. The big question is what exactly will HBO do with it - maintain it as a primarily defensive value-add to subscribers, or pivot to broader online distribution partnerships and possibly even direct-to-consumer initiatives? Daisy and I contemplate the options and risks.
Click here to listen to the podcast (11 minutes, 13 seconds)
Click here for previous podcasts
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Categories: Cable Networks, Devices, Podcasts
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HBO GO Is Terrific; The Question is How Aggressively Will It Be Deployed Longer-Term?
I've been testing HBO GO for the last couple of weeks and my reaction is overwhelmingly positive. The service is easy to navigate and incredibly responsive. Importantly, the video quality (particularly in the iPad app) is top-notch - you'll quickly forget the video is actually being delivered over the Internet and a WiFi network). And with over 1,600 pieces of content, there's no shortage of what to watch. Though I'm not an HBO subscriber, I've watched a number of HBO programs on DVD over the years (e.g. Entourage, The Wire, The Sopranos) and so the ability to get both past seasons, as well as current season episodes, in one space is highly convenient.
Obviously I'm not alone in my reactions as there have been over 3 million downloads of HBO GO just since its May 2 official release. Considering HBO has 28 million US subscribers, that's an impressive penetration level (even more so because HBO doesn't yet have agreements for HBO GO with all pay-TV providers, so some HBO subscribers can't yet access the service).
For now HBO has positioned HBO GO as a value add for existing subscribers. That's a fine place to start, but as the video landscape becomes ever more competitive, it's hard to see how HBO will be content to deploy such as strong asset mainly in a defensive manner, and not be tempted to start using it more aggressively. If and when that happens, that would be a major change in the pay-TV model. Though I questioned HBO's future in "Could HBO Be the Next BLOCKBUSTER?" HBO GO creates scenarios for how the company thrive in the online video era.
Categories: Cable Networks, Devices
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Time Warner Cable Promoting WatchESPN App for Wimbledon Viewing
Time Warner Cable is sending the below email to subscribers promoting the WatchESPN app for anytime/anywhere Wimbledon viewing. The email is the first consumer-facing example I've seen of a cable operator promoting a specific cable programmer's TV Everywhere app.
The email's copy hits the right messages nicely, emphasizing free access for existing Digital TV customers, anytime/anywhere/anyplace access on mobile devices and tablets, and easy app download instructions. The email is a winner in terms of getting the message out that TWC understands its subscribers' new viewing expectations and that it delivering a service that meets them.
Categories: Cable Networks, Cable TV Operators, Sports
Topics: ESPN, Time Warner Cable, Wimbledon
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VideoNuze Report Podcast #100 - Cable Show Review - June 17, 2011
Categories: Cable Networks, Cable TV Operators, Podcasts
Topics: Cable Show, Netflix
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@Cable Show: HBO GO Has 2.6 Million+ Downloads, Watch ESPN Has 2 Million+ Downloads
At least two major cable networks, HBO and ESPN, are getting strong traction with their mobile apps not long after launching them. HBO GO, which was unveiled in early May, has already gained over 2.6 million downloads, while Watch ESPN has generated over 2 million downloads since launching in early April. The data was released by Alison Moore, HBO's SVP, Digital Platforms, and by David Preschlack, ESPN's EVP of Affiliate Sales and Marketing in a TV Everywhere session I hosted this afternoon at the Cable Show in Chicago.
Both Alison and David stressed their twin goals of delivering anytime/anywhere experiences to their viewers while also supporting the subscriber authentication, TV Everywhere goals of their main pay-TV distributors. In fact TV Everywhere was, well, everywhere at this year's Cable show, dominating general sessions and informal discussions of the industry's future. Mostly there's broad consensus about how strategic untethering popular cable programming from the set-top box is, although many issues still remain unresolved. Chief among them are measurement, rights clearances and business relationship details.
Categories: Cable Networks, Devices
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@ELEVATE: 75% of Cable TV Programming to be on TV Everywhere in 2 Years
At the ELEVATE conference earlier this week I moderated a panel with executives from 3 of the leading proponents of TV Everywhere, during which they estimated about 75% of cable TV programming could be available on connected and mobile devices within 2 years. That amount would be a huge increase from what's currently available and would also represent a massive shift by the pay-TV ecosystem to delivering content to IP devices. It would also represent a huge game change in the overall TV advertising ecosystem depending on what ad policies are implemented (full ad load, partial load, etc.).
The panelists included David Preschlack, EVP, Affiliate Sales and Marketing, Disney & ESPN Networks Group, Jeremy Legg, SVP Business Development & Multi-Platform Distribution, Turner Broadcasting and Matt Strauss, SVP & GM, Comcast Interactive Media.
With the rise of over-the-top competitors (e.g. Netflix, Hulu, iTunes, etc.), TV Everywhere has emerged as the pay-TV industry's number one priority. No doubt at next week's Cable Show in Chicago it will be the most pervasive topic of discussion. Yet significant issues remain for TV Everywhere's rollout. Chief among them are lack of adequate audience measurement systems, limited rights and caution among cable networks. We discussed each on the panel.
Categories: Cable Networks, Cable TV Operators
Topics: Comcast, ELEVATE, ESPN, Turner
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Why Cord-Cutting May Actually Be Good News for Cable Operators After All
Yesterday's big headlines - that Netflix now accounts for almost 30% of all downstream Internet traffic - is further evidence of the popularity of the company's streaming service, and also a preview of the significant structural changes that lie ahead in the over-the-top (OTT), broadband ISP, and pay-TV industries. Specifically, as Netflix and other OTT providers' surging traffic compels broadband ISPs to administer strict bandwidth usage caps and adopt usage based pricing ("UBP"), the stage will be set for a new era in how tens of millions of consumers decide which in-home entertainment services they subscribe to. If you thought that would be very bad news for cable operators specifically, it might be time to think again.
Cable operators and programming networks are the focal point of upcoming change. Operators in particular, because they are both the largest providers of both subscription video services and broadband Internet services, are really at center stage. Much of the hype around "cord-cutting" over the last year has implied they are on the losing end of this potential activity. Often overlooked however, is the fact that as consumption shifts to OTT sources, consumers' bandwidth needs escalate. As such, the door opens for them to institute UBP, as AT&T has recently done.
Categories: Aggregators, Broadband ISPs, Cable Networks, Cable TV Operators
Topics: Netflix
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HBO GO Launches on iOS and Android Devices: A Necessary But Insufficient Step
Today marks the "official" launch of HBO GO - the premium cable network's authenticated TV Everywhere service - on mobile devices running iOS (iPad, iPhone, iPod) and the Android OS, although it has been technically available since late last week in the iTunes App Store and Android Market. HBO signaled May 2nd as the date of availability in a teaser video posted last month on YouTube, and I'm guessing a press release will be forthcoming.
With the iOS/Android rollout, HBO has taken a necessary, but insufficient step toward improving its standing in a world that has grown dramatically more competitive in a very short time. HBO GO, which is only available to HBO subscribers, and even then, only to those whose pay-TV operator has a deal to authenticate HBO GO, is narrowly focused on delivering more value to those who have already chosen to subscribe to HBO. As HBO co-president Eric Kessler told the NY Times in February, "It's about enhancing the satisfaction and continuing the life cycle of the subscriber."
Categories: Cable Networks, Devices
Topics: Android, HBO, iOS, Netflix
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1. Time Warner CEO Jeff Bewkes Flip-Flops, Now Admires Netflix
Certainly top on this week's unexpected list was Time Warner CEO Jeff Bewkes' newfound affection for Netflix, expressed in an interview with Charlie Rose at the Tribeca Film Festival (see below video, starting at the 4:40 point). Until now Bewkes has been withering in his derision for Netflix, famously comparing them to the Albanian army, and all but saying HBO would only offer its programs for streaming on Netflix when hell froze over.
But this week Bewkes totally flip-flopped, saying things like he looks at Netflix with a certain sense of "fondness," "Welcome brother" to the subscription business, "You've gotta admire them," "They've done a bold thing, a good thing in many ways," "They're offering a subscription service that is very valid and effective" and "They've got a lot of interesting stuff on there mostly that's available in other places but that's no criticism."
Categories: Aggregators, Cable Networks
Topics: HBO, Netflix, Time Warner
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Senior Comcast, ESPN, Turner Executives to Discuss TV Everywhere's Game-Changing Role at ELEVATE
I'm delighted to announce that TV Everywhere's game-changing role in the TV and advertising ecosystems will be the topic of a marquee panel of cable
industry executives at ELEVATE: Online Video Advertising Summit on Tuesday, June 7th in New York City. The panel, which I'll moderate, is titled "TV Everywhere: Game-Changer for Premium Online Video and Advertising" and includes:- Jeremy Legg - SVP, Business Development and Multi-Platform Distribution, Turner Broadcasting System
- David Preschlack - EVP, Affiliate Sales and Marketing, Disney & ESPN Networks Group
- Matt Strauss - SVP and General Manager, Comcast Interactive Media
As I've written since it first burst onto the scene almost 2 years ago, TV Everywhere is the most significant initiative in the TV industry today because it aims to untether all of the most popular programs from cable TV networks that have traditionally been locked to the set-top box in the TV room, making them available on myriad connected and mobile devices. In this respect, TV Everywhere is a strategic imperative for the pay-TV industry; as new entrants like Netflix, Hulu Plus and others have strongly embraced delivery to connected and mobile devices, they have raised the competitive bar for all others.
Categories: Cable Networks, Cable TV Operators, Devices, Events
Topics: Comcast, ELEVATE, ESPN, Turner
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Forget Cord-Cutting, Greed May Destroy the Cable Industry
For all the ink that's been spilled over the past year about consumer-driven cord-cutting leading to the demise of the cable industry, could it instead end up that greed will cause the industry's own destruction? Maybe so. With the fracas over Time Warner's iPad app reaching ridiculous new levels each week, the industry is experiencing its own version of the old adage "We have met the enemy and he is us."
Yesterday's turn of events - Time Warner Cable seeking a declaratory judgment from the U.S. District Court that it has the contractual rights to stream cable programming to its iPad app inside subscribers' homes, and Viacom responding with its own suit against Time Warner Cable - represent a dangerous breakdown in key industry relationships at a time when competitive forces loom larger than ever.
Categories: Cable Networks, Cable TV Operators, Devices
Topics: Discovery, iPad, Scripps, Time Warner Cable, Viacom
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New Netflix Deals Show How Little "Dexter" and "Californication" Really Matter
A couple of weeks ago, in "Showtime Circles Its Wagons, But to What End?" I questioned Showtime's decision to withdraw from Netflix streaming rights to
early seasons of 2 of its hit shows, "Dexter" and "Californication." One of the points I made was that Netflix would survive this loss just fine because they have enough streaming content already, and more coming all the time.
Sure enough, Netflix has more than proved my point, announcing a deal last Friday with 20th Century Fox that gives it streaming rights to the first season of the Fox hit "Glee," the first 2 seasons of the FX favorite, "Sons of Anarchy" and the library of "Ally McBeal" and "The Wonder Years." Then this past Wednesday, Netflix announced a deal with Lionsgate for streaming rights to the first 4 seasons of AMC's signature series "Mad Men," with 3 more seasons to follow after their on-air run (Netflix already had the Canadian streaming rights to the show).
Categories: Aggregators, Cable Networks, Studios
Topics: 20th Century Fox, Lionsgate, Netflix
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