Do millennials want pay-TV or don't they? This is one of the most hotly-debated topics in the video industry today. The "don't" camp is well-represented by Charlie Ergen, head of DISH Network, who recently said, "We’re losing a whole generation of individuals who aren’t going to buy into that model because they only want one particular show or they want to watch the show wherever they can or they want to watch it on their schedule and so that generation is not signing up to satellite or cable or phone video today."
Last week, Ergen and DISH took an important step toward re-imagining pay-TV to make it more relevant to millennials by securing OTT distribution rights to key Disney/ESPN channels. Bloomberg reported that a new OTT service from DISH could sell for $20-30/month, far less than today's typical pay-TV bundle. BTIG's Rich Greenfield subsequently fleshed out what a new lower-priced personal subscription service or "PSS" could look like: a limited access one-stream-at-a-time model geared to single-adults or light TV viewers.
Since Comcast announced its plan to acquire Time Warner Cable, there have been a number of articles about how broadband is really the main driver of the deal. No doubt broadband is very important, but Comcast still believes there's a lot of life left in its video service. To that end, the company has invested heavily in its X1 set-top box platform.
X1 is a hybrid box, delivering video via traditional "QAM" technology, while including a guide and other interactivity/content via web-based IP technology. Comcast said that X1 played a significant role in Comcast adding subscribers in Q4 '13, for the first time in 6+ years.
I've had an X1 since July, 2012, and to give a sense of its potential, I've shot an 11-minute demo of how X1 handles the NBC Olympics "Live Extra" authenticated app which is tightly integrated with its Xfinity on Demand service for highlights. First, for a little context, I show how "Live Extra" and the NBC Olympics apps work on an iPad.
I'm pleased to present the 214th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Note the interesting coincidence that we're publishing our 214th podcast on 2-14-14; hopefully it's some sort of good omen :-)
In today's podcast Colin and I parse the $45 billion Comcast-Time Warner Cable merger, announced yesterday. As I wrote, I see the deal as all about helping Comcast achieve further scale that is required in order to succeed in today's video environment. Colin notes that after TWC's bruising battle with CBS, during which it lost hundreds of thousands of subscribers, the merger will shift some power away from broadcast and cable networks.
We also discuss regulatory issues, net neutrality, the companies' bet that cord-cutting won't accelerate any time soon and lots more. There are many angles to the merger, which we'll continue discussing as the merger review unfolds.
Listen in to learn more!
Click here to listen to the podcast (22 minutes, 7 seconds)
It looks like Apple will be the first casualty of the Comcast-TWC deal. Just yesterday Bloomberg reported that Apple was negotiating with TWC for it to become the first pay-TV operator to make its programming accessible in a new, upgraded Apple TV device. Assuming the report is accurate (and who knows, given the spin game TWC was playing to rebuff Charter's bid), it's pretty fair to say that Comcast will have no interest in Apple getting its nose under the TWC tent.
Comcast has announced that it will acquire Time Warner Cable in an all-stock transaction valued at $45.2 billion. Comcast is already the biggest video and broadband provider in the U.S. and will now get even bigger, assuming the deal is approved. Comcast has committed to divest around 3 million of TWC's video subscribers to stay below 30% of the total U.S. pay-TV market, so the combined company would have approximately 30M video subscribers. Broadband subscribers would be a little less than 30M.
For me, the big takeaway from the deal is that in the broadband era, scale matters a lot - and to compete effectively, a company simply has to have it. Nearly ubiquitous broadband and wireless connectivity, plus massive proliferation of devices, have enabled online-only players to have easy access to massive global audiences. This context has helped fuel the rise of companies including Google, Facebook, Amazon, YouTube, Netflix, Twitter and many others. With innovative services and solid execution, it's now possible to create huge businesses quicker than ever.
I'm pleased to present the 212th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Earlier this week, Roku CEO and founder Anthony Wood, who I interviewed at NATPE, described his long-term vision for Roku to replace pay-TV operators' set-top boxes. Anthony believes that as online video apps become more prevalent, and pay-TV operators want to seamlessly offer them, the logistics for doing so will be so complex, that alternative approaches like using Roku, will become more attractive. Colin and I debate the pros and cons of this vision.
Then Colin walks us through Comcast's stellar Q4 '13 results, announced earlier this week. Of particular note, Comcast added video subscribers in the quarter, the first time in over 6 years. Colin has crunched the numbers and concludes that Comcast will likely have more broadband subscribers than video subscribers by mid-to-late 2014, a stunning development. We explore what this means.
Listen in to learn more!
Click here to listen to the podcast (21 minutes, 11 seconds)
Comcast reported its Q4 '13 and full-year results this morning, which included the company adding 43K video subscribers vs. a loss of 7K in Q4 '12. It was the first time Comcast added video subscribers since Q1 '07. When the biggest pay-TV operator in the U.S. reports a glimmer of health in its core video business, the question begs, are fears about cord-cutting reduced?
While I've always believed that cord-cutting was over-hyped, the reality is that Comcast's positive move does not in and of itself mean concerns about cord-cutting are lessened. That's because Comcast's gain likely says less about cord-cutting dynamics than it does about pay-TV industry share-shifting. For years, the industry pattern has been that telcos and satellite operators have been taking video subscribers from cable TV operators.
Categories: Cable TV Operators
Earlier today the DC Court of Appeals threw out the FCC's Open Internet net neutrality rules. Net neutrality advocates are upset with the FCC for pursuing an illogical regulatory path from the start. They are deeply worried that now, unencumbered by net neutrality regulations, big broadband ISPs (which also happen to be the biggest pay-TV providers) will begin to discriminate against third-party online video services by shunting them to "slow lanes" and charging new delivery "tolls."
I completely understand these concerns, but I for one don't envision any of this happening, at least not in the foreseeable future. Some of you are no doubt thinking - Will's naive, he's an idiot, he's a shill, etc. so let me explain.
Interactive video advertising provider Innovid and Cisco are building on their previously announced partnership, announcing an initiative to have ads dynamically delivered to second screens using voice-based metadata from TV programs. Innovid's CTO and co-founder Tal Chalozin showed me a demo last week of Cisco's cloud-based technology analyzing words spoken in TV programming to generate keywords and context. The information was then passed to Innovid which delivered a relevant, interactive ad to the viewer's second screen within a few seconds.
In the session "Is TV Everywhere Finally Breaking Through?" at the recent VideoSchmooze, industry executives discussed an important long-term objective for the pay-TV industry: turning TV Everywhere into TV, Everywhere. The insertion of that little comma would convert a key industry initiative into a practical, compelling and ubiquitous consumer experience.
For device-happy consumers, what's not to love about the idea of being able to watch all kinds of TV programming (sports, news entertainment, etc.) in any format (live, linear or on-demand), inside or outside their homes whenever they want?
But getting to that eventual goal involves resolving a lot of sticky business and technical challenges. In the wide-ranging panel discussion, our participants Michael Bishara (Synacor), John Harran (Turner), Marty Roberts (thePlatform), John Woods (Mediacom) and Colin Dixon (nScreenMedia and moderator) did a great job of sorting through all of the issues and articulating the opportunities.
For anyone interested in TV Everywhere, it's a highly informative 47 minutes. The video is below.
There are a lot of wild headlines these days proclaiming the death of TV and the prevalence of cord-cutting. But in a session I moderated at the recent VideoSchmooze event in NYC, Bruce Leichtman and Craig Moffett, two of the top video analysts around, shared their current data, which systematically debunks these mythologies. For anyone interested in what's really happening in the video business today, the session's video is a must-watch.
Bruce and Craig believe that both technology and mainstream media are ginning up these mythologies because they make great headlines. In fact, both cited instances where their data said "x" but the media coverage ended up being "y." All of this underscores how important it is to read media coverage of the industry with a very critical eye.
I'm pleased to present the 207th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we first discuss the prospects of a nationwide "virtual pay-TV operator" launching in 2014, as Viacom's CEO Philippe Dauman asserted will happen, in his remarks at the UBS conference earlier this week. Colin and I agree that if this were to happen, Verizon is the most likely candidate. Of note, the company has recently made 2 acquisitions (of upLynk and EdgeCast), through its Verizon Digital Media Services group, that could be very strategic in a virtual pay-TV operator play.
Colin is reasonably bullish that this this type of operator will emerge, but I still remain skeptical. Intel Media's flameout this year with its OnCue service underscores the challenges. We dive into further detail on the challenges and opportunities for virtual operators. (And note, Colin has a free white paper on 5 reasons why virtual operators will ultimately succeed)
Next we turn our attention to how fragmentation among connected TV devices is causing headaches for content providers and consumers, which I wrote about yesterday. Colin contrasts today's devices with buying a TV, noting how ridiculous it would be if some brands could access certain TV networks, and other brands accessing different ones. The TV industry would never have scaled in that case.
Listen in to learn more!
Click here to listen to the podcast (19 minutes, 46 seconds)
Samsung has announced that it has licensed the Reference Design Kit (RDK) from RDK Management to accelerate delivery of next-generation IP video onto new devices. RDK Management is a joint venture between Comcast and Time Warner Cable, with the aim of developing a standardized set of software bundles for set-top boxes.
The RDK is a pre-integrated software bundle, initially developed and licensed by Comcast to create a common framework for powering tru2way, IP or hybrid set-top boxes and gateway devices. The RDK’s software bundle can also power gateway devices, and other devices like connected TVs and other CE devices.
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.
Digitalsmiths has released its quarterly survey on consumer behavior around pay-TV and VOD, finding that consumers are continuing to “cord cheat,” with 48% supplementing their pay-TV subscriptions with OTT services, up from 35% reported in Q2 '13. Most popular for these consumers was Netflix (42%), while for individual movie rentals Redbox kiosks took the lead at 17%.
Digitalsmiths believes cord cheating is a big threat to pay-TV providers and said they must adapt and better support consumer expectations. According to the survey, the top reasons consumers are choosing OTT services like Netflix, Hulu or iTunes are because they are more convenient (53%), cheaper (48%) and allow full season TV viewing (31%).
I'm pleased to present the 204th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
We start off this week discussing the latest Hulu rumor, that it is seeking a closer alignment with pay-TV operators for Hulu Plus. Colin and I both like the possibilities here, though we recognize numerous obstacles. From a user experience standpoint, the idea of finding all of a TV show's episodes in one place - from pilot to last night's -resonates with me and would be a huge step forward from today's silo'd worlds of SVOD/OTT and VOD/TV Everywhere.
Colin points out too that Hulu's owners are already key programming suppliers to pay-TV operators, giving Hulu a better shot at partnering than, say Netflix, has. Last but hardly least, Hulu's new CEO Mike Hopkins most recently ran distribution for Fox Networks, so his expertise is perfect for figuring out how to get Hulu Plus carriage with pay-TV operators.
We then shift to discussing the launch today, of Amazon Studios' first original, "Alpha House" starring John Goodman. While we're uncertain about its critical reception, we do believe that, given originals' strategic role supporting Prime, it's the first step of an aggressive agenda. Amazon is cleverly combining data, wisdom of the crowds and traditional TV skills to select which originals to pursue.
Listen in the learn more!
Click here to listen to the podcast (18 minutes, 42 seconds)
When Comcast said earlier this week that it was increasing to 35 the number of channels available for out-of-home streaming for its subscribers, available on iOS and Android mobile devices (in addition to computers), it was another powerful sign of how TV is moving beyond the traditional confines of the living room and set-top box.
But as I thought about how robust this new out-of-home offering will be, it got me wondering, again, about the risk of subscribers sharing their passwords with non-subscribers. "Do no harm" is a key mantra among all media companies these days who must take care not to have new services or features undermine traditional value propositions. Until now this hasn't been a big issue for Comcast with its out-of-home streaming feature, as it included only on-demand content and a limited number of live channels which were solely viewable on computers. It was interesting package, but not super-compelling.
Digitalsmiths said this morning that its Seamless Discovery Platform has been chosen by 7 of the top 10 U.S. pay-TV operators, which cover 64% of the country's subscribers. Globally the company is powering discovery for over 100 million homes through 46 customers and partners. Most recently Digitalsmiths announced Australia's Foxtel as its latest big customer.
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.
New research released today by Veveo reveals that nearly 2/3 of pay-TV viewers know what they want to watch "almost always" or "most of the time." In addition, almost 75% of them said they'd like better search capabilities from their pay-TV operator, a preference that dwarfed recommendations as an option, which was cited by less than 5% of respondents. Heavier TV viewers' preference for search was even stronger.
According to Sam Vasisht, Veveo's CMO, whom I spoke to last week, the findings underscore the extent to which search has become an integral part of everyday life for many consumers. The fact that search has become a positive online experience for many means that sub-optimal search tools provided by pay-TV operators becomes more glaringly obvious, leading to viewer frustration and lost revenue opportunities.