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Even Microsoft Can't Afford to Break Into the Pay-TV Business
Here's just how expensive it has become to break into the pay-TV business: even mighty Microsoft can't afford it. Reuters reported late yesterday that Microsoft has put on hold its plan to create a pay-TV meets Netflix type
subscription service, after getting sticker shock over the cost of content distribution deals. When you have $52 billion of cash and equivalents on your balance sheet and still can't figure out how to make the numbers work, that's a pretty significant statement about how expensive licensing linear content has become.Categories: Cable Networks, Cable TV Operators, Satellite, Telcos
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Why Albert Pujols is Over-the-Top's New Best Friend
When baseball great Albert Pujols signed a staggering 10-year, $254 million deal with the Los Angeles Angels of Anaheim last week, he became
over-the-top's (OTT) new best friend. That's right, everyone including Netflix, Hulu, YouTube and Amazon, plus countless online-only content producers, should have been celebrating Pujols's new riches. Why? Because the Pujols deal is the latest example of how pay-TV seems determined to price itself out of reach for certain segments of the population, opening up a huge window for OTT to succeed.
Categories: Cable Networks, Cable TV Operators, Indie Video, Satellite, Sports, Telcos
Topics: Albert Pujols, Angels, ESPN, FOX, Liberty Global, TNT
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VideoNuze Report Podcast #113 - Verizon and the OTT Market
I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 113th edition of the VideoNuze Report podcast, for Dec. 9, 2011. In today's podcast Colin and I discuss this week's rumors of Verizon potentially launching an OTT subscription video service outside its market areas. As I wrote earlier this week, I'm skeptical of their ability to succeed, but Colin is more sanguine.
Adding to this week's intrigue was a separate report suggesting that Verizon intends to team up with Redbox on the initiative. Meanwhile Verizon isn't willing to talk about any of this, and these days you can't be sure what to believe. Beyond Verizon, in the podcast we also discuss other players' role in the OTT space such as YouTube, Dish, Amazon and Vudu, and how they're each positioned. Listen in to learn more!
Click here to listen to the podcast (16 minutes, 27 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!Categories: Aggregators, Podcasts, Telcos
Topics: Amazon, DISH, Podcast, Verizon, VUDU, YouTube
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Verizon Needs to Bring More than a Knife to the OTT Gunfight
Late yesterday Reuters reported that Verizon is looking at launching an online-only subscription service for streaming movies and TV shows outside its geographical footprint. While
such a move initially seems disruptive to incumbents like Netflix and others, the folks at Verizon better remember the old adage about not bringing a knife to a gunfight; if they really want to compete, significant investments in content and promotions are going to be required. Even then, it's not yet clear to me how Verizon succeeds in this highly competitive space.
Categories: Aggregators, Telcos
Topics: Amazon, CBS, EPIX, HBO, Netflix, Starz, Time Warner, UltraViolet, Verizon, VUDU, YouTube
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YouTube's Redesign: The Long-Term Siege on Pay-TV Begins
Yesterday YouTube launched its most significant redesign yet, with a strong emphasis on channelizing the site, deeply personalizing the experience, and integrating social interaction throughout. As the introductory blog post says, the redesign is all about helping users "discover a broader range of entertainment on YouTube." And though YouTube would never admit it, I think the redesign marks the start of a long-term siege on the traditional pay-TV model. YouTube is squarely focused on would-be cord-cutters and especially the younger generation of "cord-nevers" for whom the web has already become a bona fide alternative to expensive pay-TV services.
Categories: Aggregators, Cable Networks, Cable TV Operators, Satellite, Telcos
Topics: YouTube
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Boxee Aggressively Pursues Cord-Cutters With New Live TV Dongle
Connected device maker Boxee is aggressively going after pay-TV cord-cutters with a new Live TV dongle it is introducing this morning. The dongle plugs into a USB slot on the Boxee box and takes in a feed of live broadcast channels accessed from either an HD antenna or via a pay-TV provider (note there's always a tier of local broadcast channels available without a set-top box, however the number and quality varies widely). Boxee's CEO Avner Ronen walked me through the logic of who it is appealing to as well as the key challenges for success.
Categories: Cable TV Operators, Devices, Satellite, Telcos
Topics: Boxee
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Google To Go Over-the-Top and Compete With Pay-TV Operators? Don't Bet On Success.
Is Google planning to go over-the-top and compete with pay-TV operators for subscribers? That's the tantalizing possibility the WSJ is reporting this morning, though its article is long on speculation and short on hard facts and on-the-record sources (as best I could tell, the only concrete thing
reported is that Google has hired Jeremy Stern - a former colleague of mine at Continental Cablevision - who's "spearheading talks with media companies"). Regardless, the possibility that Google could be looking to disrupt the pay-TV business, using its own high-speed fiber network in Kansas City and maybe elsewhere, deserves attention if for no other reason than the fact that its deep-pockets and robust ad model would potentially allow it to cause trouble for incumbents.
"Potentially" is the operative word however, because any subscription TV service Google would offer would only be as good as the channels it could deliver (see Sezmi's recent retreat for proof of that). As such, the critical question here is whether the most important cable network owners - Disney, NBCU, Viacom, Time Warner, Fox, Discovery, Scripps, A&E Networks, AMC Networks, numerous regional sports networks (RSNs) and others - would agree to deals with Google. Though they would no doubt be enticed by Google as another well-funded buyer, barring some huge unknown, I'd bet that most would say "Thanks, but no thanks," effectively stymieing the search giant's ambitions.
Categories: Cable Networks, Cable TV Operators, Satellite, Telcos, TV Everywhere
Topics: Google
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Xbox 360 Poised to Deliver Pay-TV Service In Shift to Video App Model
If you believe the rumor mill, Microsoft will announce as early as today that Xbox 360 will be able to deliver pay-TV services from Comcast and Verizon, as well as additional content from HBO, Sony, Amazon and others, as the
gaming console continues its transformation into a full-fledged entertainment hub. Focusing specifically on the Comcast and Verizon aspects, the integration would mark a milestone for the pay-TV industry in moving from a services model delivered through the traditional, set-top box control point to one where video becomes more like an app (albeit an expensive one!) to be delivered through multiple CE devices.
Categories: Cable TV Operators, Devices, Telcos
Topics: Comcast, Microsoft, Verizon, XBox
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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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Here's the Real Story Behind Pay-TV's Record Q2 '11 Subscriber Losses and the Role of Cord-Cutting
Today I'm pleased to present a special 2-part VideoNuze Report podcast with guest Bruce Leichtman, who is president and principal analyst of Leichtman Research Group. Bruce has been doing primary consumer research on the pay-TV industry for 15 years and is one of the foremost industry authorities.
In part 1 of the podcast, Bruce gives a detailed analysis of the industry's record Q2 '11 loss of over 300K subscribers among its 14 largest providers. Bruce explains the industry's historical context, drills down on which companies had the biggest year-over-year change and what accounted for this. Importantly, Bruce focuses on larger macro and micro-economic factors that are influencing the industry's results in a bigger way than new technologies and innovation which often take center stage.
Then in part 2 we turn our attention to the role of cord-cutting on the industry and the influence of Netflix specifically. First, Bruce clarifies the difference between non-video subscribers and "cord-cutters," a crucial distinction which he believes has recently been overlooked by many. Bruce shares his research on how many actual cord-cutters there are, which types of pay-TV subscribers are most vulnerable to cord-cutting and what role Netflix is playing. We wrap up by discussing what's ahead and how concerned industry CEOs should be about the threat of cord-cutting.
Categories: Cable TV Operators, Podcasts, Satellite, Telcos
Topics: Leichtman Research Group
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Fox's New 8-Day Window Obsoletes Hulu's Simple User Experience
If one of the things you liked most about Hulu has been its simple, straightforward user experience - where TV programs could be quickly found and viewed - then Fox's new 8-day authenticated pay-TV window is going to feel like a big hassle. And if ABC and NBC, Hulu's other broadcast content partners and owners, adopt a similar approach to Fox, then it's really going to feel like going back to the dark ages of user experience.
Fox's authentication window means that during the first 8 days after an episode's air date only current subscribers of certain pay-TV services (DISH Network for now) or Hulu Plus can watch that episode. That in turn means that when searching for a new episode on Hulu, the resulting experience will be quite different than it has been.
Categories: Aggregators, Broadcasters, Cable TV Operators, Satellite, Telcos
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Pay-TV Industry Ekes Out Q1 Gain. Netflix Softens Its Tone. What's It All Mean?
Trying to get one's head around the true competitive dynamic between pay-TV operators and new "over-the-top" entrants is surely one of the most vexing exercises video industry executives face these days. The media's coverage only exacerbates things: when the pay-TV industry contracts for a quarter, the headlines imply cord-cutting is sweeping the nation, then when the pay-TV industry reverses and makes a small gain, the headlines suggest all is fine again in pay-TV land, and that Netflix is just a nice little complimentary service.
So it was again this week, as industry analysts released their Q1 pay-TV subscriber estimates showing that pay-TV operators as a whole eked out an increase of around 450K-500K subscribers. While that was a better showing than the past 2-3 quarters when the industry shed subscribers, it was also slightly worse than Q1 '10. Regardless, the first quarter is a seasonally-strong quarter for pay-TV, and so the gains must be tempered by what follows in subsequent quarters. The good news is that the economy is improving which can only help budget-minded households better afford expensive pay-TV services.
Categories: Aggregators, Cable TV Operators, Satellite, Telcos
Topics: Netflix
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thePlatform Powering Telstra's BigPond TV Multi-Screen Rollout
In another sign of how online video platforms (OVPs) are expanding the scope of their management and publishing services, this morning thePlatform is announcing a multi-year deal to power the big Australian telco Telstra's multi-screen BigPond TV service for TVs, set-top boxes and the web. The
announcement follows news earlier this week that Ooyala will be supporting Yahoo! Japan's multi-screen video efforts and that Brightcove has integrated with LG connected Smart TVs for direct publishing. Marty Roberts, thePlatform's VP of Sales and Marketing caught me up on the BigPond details yesterday.
The central component of BigPond TV, which Telstra announced last June, is what the company calls the "T-Box," a hybrid IP set-top box from Netgem that handles both linear channels and on-demand video. Telstra is promoting the T-Box in its bundles and it is meant to replace traditional set-tops over time. Importantly, Telstra doesn't impose any consumption caps for online video viewing via the Telstra broadband ISP. In addition to the T-Box, Telstra is also delivering the full BigPond TV service to connected TV and Blu-ray players from LG and Samsung. Telstra's goal is to have content selection on the T-Box, connected devices and online be completely synched up. For now mobile options, like an iPad or Android app aren't available, but they'll be coming soon.
Categories: Devices, International, Technology, Telcos
Topics: Alcatel-Lucent, BigPond TV, Cisco, Netgem, SeaChange, Telstra, thePlatform
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Disney Has Religion on Digital, ESPN Is At the Core
Disney held its annual investor day yesterday, and as usual, technology, and the opportunities it creates for the company, was at center stage. Disney
introduced a new initiative called "Disney Studio All Access" providing a central location for consumers to securely access the company's range of content. Though details were sketchy, key to the plan is more flexible consumer ownership and multi-device playback. For paid, downloadable video, that remains the holy grail.
Aside from the company's digital initiatives on the entertainment side of its house, the most important asset that Disney is trying to re-imagine digitally is ESPN. Just yesterday, the company announced a new distribution deal with Verizon, which emphasizes live online streaming of ESPN, ESPN2, ESPNU and ESPN Buzzer Beater. The deal is similar to one inked last September with Time Warner Cable, the country's 2nd-largest cable operator. No doubt others will follow.
Categories: Cable Networks, Cable TV Operators, Sports, Telcos
Topics: Disney, ESPN, Time Warner Cable, Verizon
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VideoNuze Report Podcast #87 - Feb. 11, 2011
Daisy Whitney and I are pleased to present the 87th edition of the VideoNuze Report podcast, for February 11, 2011.
In this podcast, Daisy and I do a deep dive into the role of sports in pay-TV packaging, based on my post from Monday, "Not A Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year." I think this is a fascinating topic and something that has been under-reported even though it has huge implications for pay-TV subscription rates as over-the-top services gain awareness.
The basic premise of my post was that since a relatively small cluster of sports-oriented channels (e.g. ESPN, TNT, Regional Sports Networks and others) collectively cost pay-TV operators $10 per month, then the charges being incurred by non-fans and casual who fans who rarely, if ever watch these channels, could amount to at least $2 billion per year. Since writing the post and gaining feedback from various sources, it's actually quite possible that the annual charges incurred in exchange for little-to-no value could exceed $3 billion. Whatever the number is, it's very large, and effectively represents a massive subsidy that non-fans and casual fans pay each year because of escalating sports TV rights deals and astronomical player compensation.
Click here to listen to the podcast (17 minutes, 8 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!
Categories: Cable Networks, Cable TV Operators, Podcasts, Satellite, Sports, Telcos
Topics: Comcast SportsNet, ESPN, Hulu, NESN, Netflix, Podcast, RSN, TNT
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What's Up With Verizon Wireless Throttling Its Heaviest Users?
Verizon's well-orchestrated buzz-building campaign for its iPhone launch yesterday hit a speed bump as stories began to circulate that even though it was promoting an unlimited data plan as a differentiator, it would actually
throttle its heaviest users. Verizon's official policy is that "if you use an extraordinary amount of data and fall within the top 5% of Verizon Wireless data users we may reduce your data throughput speeds periodically for the remainder of your then current and immediately following billing cycle to ensure high-quality network performance for other users at locations and times of peak demand."
Topics: iPhone, Verizon Wireless
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Verizon Challenges Net Neutrality Regulations
Yesterday Verizon appealed the FCC's new net neutrality regulations in the DC Court of Appeals, alleging that the FCC has exceeded its authority. The move is a little surprising given that last August Verizon seemed accepting of net neutrality, by submitting a joint net neutrality proposal with Google. What the two submitted and what the FCC eventually passed are different in a number of ways, but one way that they're similar is in the light regulatory touch granted to wireless Internet ISPs, which was a key focus of Verizon's given its massive wireless business. Even the treatment of wired ISPs wasn't terribly onerous, which is one of the reasons why a number of consumer advocacy organizations are also threatening a challenge to the FCC.
Other than trying to subvert the FCC's authority generally, it's not entirely clear to me what Verizon's trying to accomplish here. One thing's for sure, Verizon will have plenty of help from Republicans who are also challenging net neutrality.Categories: Regulation, Telcos
Topics: FCC, Net Neutrality, Verizon
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CES Takeaway #2: Don't Count Out the Pay-TV Operators
(Note: Each day this week I'll be writing about one key takeaway from CES 2011.)
If you've been thinking that pay-TV operators were imminent roadkill due to burgeoning "over-the-top" consumption and imminent cord-cutting mania, then important news from CES 2011 should cause you to reassess your assumptions. Instead of new technology undermining pay-TV businesses (which is too often how media characterizes things), the largest operators are starting to show how technology can be used to create compelling new value for their subscribers and enhance their competitiveness even as they relinquish a little control.
At CES, pay-TV announcements focused primarily on 2 areas: extending viewing to tablet computers and eliminating the set-top box by delivering full channel line-ups over broadband to connected TVs. Comcast, the largest U.S. pay-TV operator, made announcements spanning both: live, in-home access on iPads, with on-demand access outside the home, plus Xfinity TV access on certain Samsung connected TVs and on its new Galaxy Tab tablet. Time Warner Cable announced deals with both Samsung and Sony to deliver its line-up to certain connected TVs as well. Dish Network also unveiled its "Remote Access" service for Android tablets, allowing both live and on-demand viewing using the Sling Adapter (it had announced this for iPads in December). Last fall, Dish was also the first pay-TV operator to integrate with Google TV.
Categories: Cable TV Operators, Devices, Satellite, Telcos
Topics: AT&T, Comcast, Netflix, Samsung, Sony, Time Warner Cable, Verizon
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Online/Mobile Video's Top 10 of 2010
2010 was another spectacular year of growth and innovation in online and mobile video, so it's no easy feat to choose the 10 most significant things that happened during the year. However, I've taken my best shot below, and offered explanations. No doubt I've forgotten a few things, but I think it's a pretty solid list. As much as happened in 2010 though, I expect even more next year, with plenty of surprises.
My top 10 are as follows:
Categories: Advertising, Aggregators, Broadband ISPs, Broadcasters, Cable Networks, Cable TV Operators, Deals & Financings, Devices, Mobile Video, Regulation, Satellite, Technology, Telcos
Topics: 4G, Android, Apple, Google TV, iPad, Net Neutrality, Netflix, YouTube
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5 Items of Interest for the Week of Dec. 12th
Happy Friday. Once again I'm pleased to offer VideoNuze's end-of-week feature analyzing 5-6 interesting online/mobile video industry news items from the week that we didn't have a chance to cover previously. This week I'm changing the format a little bit, creating an individual post for each item. I'm doing this in response to reader interest in being able to share individual items (not the whole group) more easily. Let me know what you think of the new format. Here they are:
1. Potential YouTube-Next New Networks deal is a bit of a head-scratcher
2. Here's a great example of why TV Everywhere matters so much to the pay-TV industry
3. Hulu's Kilar: "Hulu Plus now a material portion" of revenues
4. Google not ready to announce fiber winning communities
5. Tiffany shows online video works for luxury retailers
Read them now or check them out this weekend!Categories: Aggregators, Broadband ISPs, Cable Networks, Cable TV Operators, Commerce, Deals & Financings, Indie Video, Satellite, Telcos
Topics: Google, Hulu Plus, Netflix, Next New Networks, Tiffany, YouTube
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