ESPN has reported a slew of viewership data for the 2013 college football season across both traditional TV and digital platforms. Of note, WatchESPN recorded a 20% increase in average live game usage vs. 2012, to 32,000 live unique viewers. Though that's a healthy increase, the incremental viewership WatchESPN represents is still quite small compared to TV viewing. ESPN said that its networks averaged nearly 1.9 million viewers for the 254 regular-season games that were broadcast. Across all of its networks, a total of 189 million people watched games.
There is no doubt the TV industry is changing dramatically, largely due to the rise of online and mobile video viewing. But is it "dying," "imploding" or being "nuked" as some recent tech media headlines assert? No, not yet anyway. As a close observer of all things video, it's just mind-boggling sometimes to see how data is conflated to support distorted conclusions. If your company's product strategy were guided by today's headlines alone, you'd be on a course to disaster.
To help set things straight, Piksel's Alan Wolk has put together a really good slide deck with data debunking 7 of the bigger myths floating around these days (1) cord-cutting is a mass movement, (2) kids ignore mainstream TV, (3) your pay-TV provider is the one forcing you to pay for 800 channels, (4) cutting the cord lets you stick it to the cable company, (5) second screen is all about social TV, (6) TV viewing has decreased and (7) in the future we'll be able to watch TV wherever, whenever and however we want.
I'm pleased to present the 206th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we discuss 3 of our key takeaways from this past Tuesday's VideoSchmooze, which over 230 industry executives attended. The morning was jam-packed with learning and insights, which I'll continue to share in the coming weeks, along with the session videos.
First, Colin shares the observation of Craig Moffett, who was on the opening session, that many content providers are assuming Netflix/other OTT providers are not a substitute for pay-TV over time. Craig believes this is an incorrect assumption and that if content providers come to depend too heavily on digital licensing revenues from Netflix and others, they run the risk of addicting themselves, even if/when their core businesses suffer due to audiences shifting.
Next, on the mobile video session I moderated, Silvia Lovato from PBSKids Digital shared the stunning data point that 75% of its viewership from its 2-5 year-old audience now occurs on mobile devices. I believe this has incredibly profound societal implications 10, 20 and 30 years down the road, as kids learn from the earliest age to expect programming fully on-demand.
Last, we turn to Smart TVs. On the online video advertising session, John Nitti from ZenithOptimedia (who oversees $10 billion of client spending) Eric Franchi from Undertone said Smart TVs are too fragmented to be an appealing environment for advertisers for now. As more online viewing shifts to the big screen, it's imperative that advertising follow, but the separate ecosystems of each Smart TV manufacturer makes it difficult for both developers and advertisers for now. Some form of aggregation/streamlining must occur to create the scale advertising requires.
Listen in to learn more!
Click here to listen to the podcast (19 minutes, 16 seconds)
Binge-viewing is a bona fide phenomenon that's not only changing consumers' TV viewing behaviors, but also creating fissures in the TV industry. Recently, in "For U.S. Cable Operators, Netflix Partnerships Are Fraught With Risk," I outlined how binge-viewing is driving a competitive dynamic over content rights between Netflix and pay-TV operators' VOD and TV Everywhere plans. Adding further detail, this past Friday, Vulture published an excellent article with specific examples of how this battle is brewing.
According to Vulture, FX and Turner are telling studios from which they obtain TV shows that they need rights to stream the full current season of shows (known as "stacking" rights) not just the most recent 3-5 episodes. Part of the networks' rationale is they need to give late-coming viewers an easy path to watch from the beginning of a season, rather than just enabling existing viewers a way to catch up.
Market researcher IHS has released its first study of TV Everywhere deployments in the U.S., finding that 73 different cable networks are now allowing authenticated online/mobile access for on-demand viewing. Per the chart below, NBCU leads among the ad-supported segment, with 15 of its 18 networks offering some TVE VOD option, followed by Time Warner (Turner) with 9 networks and News Corp. and Viacom each with 6. Discovery is the only major cable network group not yet offering TVE, but IHS expect that to change soon.
AOL has scored a huge coup with a deal announced today to syndicate ESPN video content across its owned-and-operated sites, plus its distribution network of 1,700 publisher sites. ESPN video in AOL will be accessible on desktops, smartphones, tablets and connected TV devices.
Importantly, the deal underscores the allure of online video syndication. By choosing to syndicate through AOL, ESPN concluded - despite its already formidable presence as the top-ranked sports property online - that AOL's distribution network could provide still further online reach and monetization potential. That's no small statement, and it is a testament to both AOL's video growth over the past several years and to the strength of the "Syndicated Video Economy" concept I began talking about back in 2008.
(Note: Following is the first of several interviews I'm doing with speakers appearing at X Media Research's upcoming BroadbandTVCon in Hollywood on Nov. 5th and 6th, where I'll also be moderating. VideoNuze readers can save $75 on registration using the code "VideoNuze.")
Following is an edited transcript of my interview with Lisa Judson, GM of YEAH!, a new streaming movie service launched by AMC Networks this past March.
What is the philosophy behind YEAH!?
We believe that movies have become a commodity online and that we could provide a unique experience, to enrich a film with original content about the film. We try to tell the story of the movie while you watch the movie. We see ourselves as movie lovers, so we're aligned with our audience. We don't want to just deliver a movie, but rather an overall experience that will connect and engage audiences (see screenshot below).
Reports surfaced last week that Intel Media's planned OTT pay-TV service "OnCue" has hit a major speed bump, and the company is now looking for potential partners such as Samsung or Amazon to help get the service launched.
I for one was not surprised by the news, as I've regarded Intel Media's pay-TV venture as facing extremely long odds. As well, I view the likelihood of Samsung, Amazon, or anyone else riding to Intel's rescue as being similarly improbable. Since Intel Media reportedly has had a 300-person team working on OnCue for almost 2 years, its potential demise would be an expensive lesson for the company in how hard it is to break into the pay-TV industry.
(Note: I will NOT disclose anything about last night's series finale, so fans, you're safe to read on without spoilers.)
Last night was the series finale of the hit AMC show "Breaking Bad." I count myself among the millions of super-fans who fell in love with the series from the start and have been loyal ever since. Importantly though, my viewing experience with Breaking Bad distinguished itself from every other TV show I've ever watched: it was the first one where I watched every single episode on-demand and without ads.
In fact, my experiences with Breaking Bad perfectly illustrate so many of the video industry themes I write about on VideoNuze each day that I thought it would be worth sharing some of them and what I learned.
Adobe is announcing today that Turner Broadcasting is its latest customer of Adobe Primetime, the company's multi-screen TV Everywhere and monetization solution. Turner will be using Primetime to power TNT and TBS apps and web sites, along with the Primetime player and dynamic ad insertion, PayTV Pass authentication and Primetime DRM.
Jeremy Helfand, VP Adobe Video Solutions, told me that until now Turner had been using a combination of home-grown and point product solutions, which are being replaced with the Primetime suite. Turner has been the earliest and staunchest supporter of TV Everywhere among cable TV networks, going back 4+ years to the high-profile joint news conference with Time Warner CEO Jeff Bewkes and Comcast CEO Brian Roberts, announcing the initiative.
I'm pleased to present the 194th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. First up this week we discuss CBS CEO Leslie Moonves' remarks on CNBC essentially declaring victory in the company's retrans dispute with Time Warner Cable because it had preserved its ability to license its programs to Netflix and Amazon. Listeners will recall that 3 weeks ago on the podcast we talked about how OTT licensing was at the heart of the dispute and the consequences for TV Everywhere.
Next we transition to questioning whether there's any real benefit for TV networks and pay-TV operators to stream linear channels to connected TVs. Colin observes that recent data from the BBC indicating very low levels of linear streaming on connected TVs appears to question the value of the Disney-Apple TV and Time Warner Cable-Xbox 360 deals. We speculate that these are mainly meant for 2nd or 3rd TVs that don't have pay-TV set-top boxes.
Last, we chat briefly about the massive 3-part series that the NY Times ran just before Labor Day on ESPN's dominant role in college football - a long, but fascinating read. As I wrote, it's well worth the time for anyone interested in the influence of big time TV money not only on college sports but also on the broader American higher education system.
Click here to listen to the podcast (17 minutes, 41 seconds)
The NY Times is currently running a huge, 3-part, page 1 expose on ESPN's transformative role in college football. It's a must-read for anyone interested in a behind-the-scenes, in-depth account of how the sports network's massive financial strength has completely changed college football, from game day and time scheduling to conference re-alignments to how star players are created. Even more broadly, the article speaks to the pervasive role college football now plays in American higher education.
A key focus of the first two parts, here and here, is the willingness of particular schools (e.g. Texas Christian, Boise State, Louisville) to play weekday night games in order to provide ESPN live football throughout the week. Various representatives of the schools are quoted recognizing the coverage they received from ESPN as being critical to raising their schools' visibility and profiles. For ESPN, importantly, these mid-week games and assorted promotional activities showcased for still other schools how valuable being a flexible partner for ESPN can be.
Disputes between broadcasters and pay-TV operators over so-called "retransmission consent" fee payments are a dime a dozen. Broadcasters, seeking their slice of the monthly fees pay-TV operators pay cable TV networks, have bargained hard for this new revenue stream. In this sense, the current CBS-Time Warner Cable retrans standoff is business as usual. What is new, however, is that digital rights - and more specifically the huge licensing fees that OTT's richest players, Netflix and Amazon, are now paying - have taken a central role in this particular drama.
As the WSJ reported last Friday, the real obstacle between CBS and TWC isn't what TWC will pay to retransmit the CBS signal, but rather what digital rights will be included, and at what incremental cost. Five years ago, these rights were a virtual throwaway, but now it's a totally different situation. Here's what changed:
I'm pleased to present the 188th edition of the VideoNuze weekly podcast with my weekly partner Colin Dixon of nScreenMedia. This week rumors were once again flying about Apple and Google looking to enter the pay-TV industry, which Colin and I separately wrote about here and here.
In our discussion, Colin notes that any potential move would be expensive, given the need to carry many networks in a typical bundle. Colin also believes that Apple's rumored plan to compensate networks for ads skipped in a premium service it may offer has some merit based on his back-of-the-envelope analysis. But Colin is skeptical the networks will be interested in shifting their model away from advertising.
I see it the other way around; given high DVR penetration, networks could be intrigued by the idea of moving more of their economics to fees. The problem is I just don't see how the economics would work for Apple or consumers.
Regrettably, all of this is based on rumors so we readily admit we don't have solid facts on which to base our arguments. And that's why I consider Apple and Google's pay-TV aspirations to be the industry's longest-running soap opera.
Listen in to learn more!
Click here to listen to the podcast (19 minutes, 53 seconds)
Netflix's original series "House of Cards" received 9 Emmy nominations this morning including in 3 of the marquee categories best drama, best actor (Kevin Spacey) and best actress (Robin Wright). The nominations were a first for online original programming and therefore are a bona fide milestone for the rapidly growing online video medium. In addition, Netflix picked up 3 Emmy nominations for "Arrested Development."
While Netflix bet big to put HoC in a league with cable stalwarts - and other best drama nominees "Game of Thrones," "Breaking Bad," "Homeland" and "Mad Men" plus the lone broadcast series "Downton Abbey" - an intriguing question to ask is whether the HoC nominations signal the beginning of an Emmy trend for online original programs or whether HoC is more of an outlier? In other words, can online get on the same type of award-winning growth curve for its originals as cable networks have over the last 20 years, helping drive pay-TV subscriber acquisition and retention?
It's time for the latest episode of the industry's best and longest-running soap opera, "Google, Apple and the Mission to Disrupt Pay-TV." New reports this week (here and here) suggest that the two tech giants are once again angling to get a piece of the pay-TV industry, which, despite already being under attack from all sides, appears to be holding its own.
As in the past, the current episode is based only on "people familiar" with the discussions Google and Apple executives are each having with pay-TV industry players. Google and Apple executives as usual are offering "no comment." The new episode features twists to keep all of us engaged. Apple is reportedly contemplating a "premium" version of its service that will allow users to skip ads, with Apple compensating TV networks for lost ad revenue (not to spoil the drama, but it's awfully hard to see how the math would add up on such a plan or why the networks themselves would go for it). And Google has reportedly even demo'd its product (shocking!), though no details on what it is or how it is different were released.
Investment firm Needham & Company has released its latest Future of TV report, with lead analyst Laura Martin concluding that the biggest current risk to the TV industry's economics is unbundling of subscription TV channels. Martin asserts that if consumers had the option to choose their channels on an a la carte basis, rather than the multi-channel bundles that pay-TV operators currently offer, approximately 50% of today's TV revenue would be eliminated with fewer than 20 TV channels surviving.
The draconian forecast adds a financial dimension to the ongoing debate around whether the TV industry will need to radically re-think its business approach if - and it's still a big "if" - cord-cutting gains momentum. To date cord-cutting (and "cord-nevering," where younger viewers simply don't subscribe to pay-TV as in the past) have been relatively muted, with estimates for 2012 in the 500K range. However, several key industry trends such as the escalating cost of pay-TV, changes in consumer behaviors, proliferation of connected and mobile viewing devices, the surge in OTT SVOD adoption (e.g. Netflix) and DVR-based ad-skipping all suggest that the industry's traditional bundled model could be tested over the next few years.
At last month's Online Video Ad Summit, I did a great one-on-one interview with Lori Conkling, who's the EVP, Strategy and Business Development for Media Innovation and Cross Company Initiatives at NBCU (yes, Lori concedes that's a mouthful!). Lori joined the relatively new NBCU group several months ago from A&E Networks, where she oversaw multi-platform distribution strategy for the company's 10 networks.
In the interview, we touch on a broad range of topics including: fragmentation in audiences, devices and advertising, the criteria NBCU uses in determining which new technologies/opportunities to pursue (e.g. financial, lessons to be learned, etc.), NBCU's interest in original online-only programming, the status of TV Everywhere, mobile video usage patterns, and lots more. For anyone looking to get a peek into how big media companies are thinking about online video, the interview is a must-watch.
The video is below and runs 39 minutes and 29 seconds.
CNN and BuzzFeed are partnering to create a new YouTube channel called "CNN BuzzFeed" to break original news online. The channel will feature current and archived CNN video and like all BuzzFeed content, is targeted to a younger, social media savvy audience.
CNN BuzzFeed will capitalize on two of the most important attributes of today's online video landscape: short-form and syndication. Last week, data from ad manager FreeWheel showed that "Digital Pure-Play" content providers grew their video views by 47% year-over-year (with 84% of their views coming via syndication to 3rd-party sites), while views from long-form "Linear + Digital" providers (e.g. broadcast and cable networks) decreased by 8%.
I'm pleased to share that Lori Conkling, NBCUniversal's EVP of Strategy and Business Development for Media Innovation and Cross Company Initiatives, will be a featured speaker at the June 4th Online Video Ad Summit in NYC. Lori joined NBCU recently to drive strategy and monetization of the company's cross-platform content. In her role, Lori is also a key executive in advanced advertising, content windowing and mobile. Lori previously ran distribution at A&E Networks; at NBCU she reports into Lauren Zalaznick.
At the Video Ad Summit, I'll be interviewing Lori about the choices and challenges involved in architecting a successful cross-media strategy. Today, media companies have unprecedented opportunities to engage with their audiences, but determining which ones have the best ROI and should be pursued is harder than ever. In the interview, expect insights about changing consumer behaviors, the shift to on-demand viewing, second-screen apps that work, effective monetization, TV Everywhere, mobile/connected devices and lots more.
Early bird discounted registration for the Video Ad Summit is available until May 17th. You can save $100 by registering early, and as an added bonus, all early bird registrants will be eligible to win a Samsung 40-inch Smart TV, presented by VideoHub. We'll do the drawing just before lunch. Startups and students are eligible for even deeper discounts, contact me to learn more.
I look forward to seeing you on June 4th!