I'm pleased to present the 200th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we debate whether U.S. cable operators should partner with Netflix, a prospect that was reported this past Monday by the WSJ.
Colin and I have very different opinions on the topic - I believe that on balance it would be disadvantageous for operators to partner and integrate Netflix into their experiences while Colin thinks it would be beneficial for them. As I wrote earlier this week, I think that operators helping Netflix get bigger and stronger ultimately means it becomes a stronger competitor and therefore a more potent cord-cutting and shaving threat.
Conversely, Colin believes integrating Netflix (as a couple of European operators are doing) would help their subscribers' user experience, which should be their overriding goal. Colin doesn't see Netflix as a threat, even as it looks more and more like HBO over time. I think that's underestimating Netflix's competitive potential. Rather than partnering with Netflix, operators should be doing everything possible to enhance their TV Everywhere and VOD initiatives.
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Click here to listen to the podcast (22 minutes, 29 seconds)
The WSJ has reported that Netflix is holding early stage discussions with at least two U.S. cable operators, Comcast and Suddenlink, about having its app included in their set-top boxes. I've been seeing a lot of arguments for why Netflix partnerships would be good for cable operators, but it seems to me there would be a lot of risk involved for them if such deals materialized.
Helping Netflix become bigger and stronger would be disadvantageous for cable operators. First and foremost, this would be felt in the area of content rights. By securing past seasons of TV programs, Netflix has driven the binge-viewing phenomenon and become its biggest beneficiary. I expect binge-viewing will only gain in popularity going forward as more people experience it and more devices make it ever easier to do. Adoption of binge-viewing means those distributors with strong video libraries will do better.
I'm pleased to present the 199th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. In this week's edition we discuss the new "See It" tool announced in a partnership between Comcast/NBCU and Twitter.
Beginning in November, certain tweets about TV shows will carry the "See It" button. When users click on it, they will be given choices to watch the program now on their mobile device, tune their Comcast X1 set-top to that channel to watch on TV, set their DVR or receive a reminder (more about how See It works here).
Colin and I both like See It's potential to convert the "chatterfest" that now regularly occurs on Twitter around TV shows and live events (sports, award shows, etc.) into higher viewership. Tightly coupling social discovery and the opportunity to immediately watch is very compelling. If Twitter can show See It can actually driving viewership (note, still a big "if"), it would become a very important promotion tool for the TV industry.
We also discuss how See It works with authentication/TV Everywhere, the critical role that Comcast's new IP-based X1 set-tops play in enabling See It, how the rest of the pay-TV industry might adopt See It, and the potential to spread See It to other social sites. See It's widespread adoption will require a lot of TV ecosystem support, but if its value is quickly proven, we believe that could happen.
(Last - Colin and I will both be participating in BroadbandTV Con in Hollywood Nov. 4-6. Come meet us! VideoNuze readers get $75 off conference registration using the code "VideoNuze." Colin will also be hosting a pre-conference workshop.)
Click here to listen to the podcast (17 minutes, 19 seconds)
There is a lot of talk these days about pay-TV cord-cutters and cord-nevers and how OTT providers can leverage this group to build their businesses. But a data point from research firm Leichtman Research Group last week that caught my eye suggests this market may be smaller than many people think and also not growing very fast. LRG noted that just 9% of U.S. homes subscribe to a broadband Internet service, but not a pay-TV service, up just slightly from the 8% level in both 2011 and 2012 (see graph below).
Further, Bruce Leichtman of LRG told me that of the broadband/no pay-TV group, just 37% get their broadband from speedier and pricier cable or telco fiber deployments. That compares with 75% taking these services among other broadband subscribers (remember than cable and telco fiber are by far the most prevalent broadband services).
Topics: Leichtman Research Group
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.
Here's a great example of how robust the cloud has now become: thePlatform, a leading online video publishing company, is announcing a new "Virtual TV Framework" today, that allows pay-TV operators to deliver their FULL linear and on-demand services via the cloud, to any connected/mobile device. Until now, pay-TV operators have mostly offered only VOD or a limited set of linear channels as part of their TV Everywhere initiatives. Now the new Virtual TV Framework will allow them to replicate ALL of their services for cloud-based delivery.
Why does this matter? Because cloud-delivery makes it easier for pay-TV operators to enhance their subscribers' experience with existing services and to develop new ones, while also reducing delivery costs. It's no secret that the landscape for video services has become much more competitive with the advent of innovative OTT options from Netflix, Hulu, Amazon and others, so consumers are expecting more from their pay-TV operators. As well, given the high price of pay-TV service, delivering more value has become a key industry priority - this is the essential role of TV Everywhere.
Interactive video advertising provider Innovid, and technology giant Cisco have unveiled a new partnership today at IBC meant to deliver interactive, contextual video ads to second screens.
As Innovid's CEO and co-founder Zvika Netter explained to me, the proof-of-concepts at IBC show how Innovid taps in, via API, to a Cisco-powered metadata stream associated with a pay-TV operator's services to TVs and second screen apps. The metadata allows Innovid to deliver interactive iRoll ads to the second screen apps that are synched with ads that are running on TV. A second proof-of-concept also shows this done by location. Second screen apps from pay-TV providers have become a key priority as part of their TV Everywhere initiatives.
ActiveVideo Networks has scored a big win, announcing that Liberty Global, the largest international cable operator with over 24 million subscribers, has chosen ActiveVideo's CloudTV software to enhance Liberty's rollout of Horizon TV, its next-gen video platform. Sachin Sathaye, ActiveVideo's VP of Strategy and Marketing, told me that Liberty will use CloudTV as a complement to Horizon for existing set-top boxes and connected TV devices (i.e. where new Horizon STBs aren't deployed). Services will include cloud DVR, VOD navigation and advanced apps. Timing for rollout hasn't been disclosed yet.
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)
I'm pleased to present the 192nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
In this week's discussion, we talk more about the unexpected role that Netflix and Amazon are playing in the CBS-Time Warner Cable retransmission consent dispute, which has knocked CBS off the air in major markets like NYC, LA, Dallas and elsewhere. As I wrote earlier this week, though "retrans" disputes have become commonplace, a new wrinkle in this particular one is that digital distribution rights are actually the main sticking point.
Having made lucrative digital deals with both Netflix and Amazon, CBS is justifiably reluctant to simply throw digital access to its programs into a deal with TWC, as it has in the past. The standoff highlights the uphill battle that pay-TV operators are having gaining content rights for their TV Everywhere services, which remain like Swiss cheese, with major holes in program availability. It also underscores the transformational role OTT powerhouses like Netflix and Amazon are having on the broader TV industry.
Further, Colin believes there's an opportunity for new market entrants (e.g. Intel Media, Sony, Apple, Google, etc.) to bid for both digital and linear rights, and then package access for consumers in inventive new ways. Colin sees broadband's lower cost of delivery creating a big advantage for these new players. I'm skeptical however, noting that the huge expense involved in licensing content and promoting a service from scratch would more than outweigh delivery savings. But, with so much change happening in the market these days, nothing can be counted out.
Click here to listen to the podcast (19 minutes, 25 seconds)
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:
A fortuitous confluence of events could give Aereo a nice bump in visibility and adoption in New York City this week. First, CBS went dark for hundreds of thousands of NYC subscribers last Friday afternoon, as the broadcaster and Time Warner Cable were unable to agree on retransmission consent compensation. Then over the weekend, Tiger Woods - by far golf's biggest TV draw - smoked the field to win the WGC-Bridgestone golf tournament, which was televised by CBS (though not seen by New Yorkers). The win makes Tiger the odds-on favorite to win the fourth and final major golf event of the year - the PGA Championship, being played in upstate New York starting Thursday.
CBS has the weekend afternoon TV rights to the PGA, following TNT's Thursday/Friday and weekend morning coverage. Tiger is gunning for his first major win in 5+ years, since his infamous infidelity scandal knocked him off his game. If Tiger is leading or among the leaders going into the weekend, it would set up intense interest and very strong CBS viewership. But with CBS blacked out - and the network blocking TWC New York subscribers' access to online programming - New Yorkers wouldn't get to see Tiger in action.
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.
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Click here to listen to the podcast (19 minutes, 53 seconds)
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.
Remarkably, it's already been 4 years since the CEOs of Time Warner and Comcast unveiled the concept of TV Everywhere in a high-profile press event. Since then numerous successful services have launched (e.g. HBO GO, WatchESPN, etc.), yet the prevailing consensus - which I agree with - is that TV Everywhere hasn't yet been adopted at nearly the level anticipated.
I've written in the past about the 5 key things I believe are holding back TV Everywhere and 1 of them is "authentication" - the process of verifying a user and providing rights to watch programming covered by their subscription. Picayune as it might seem at first blush for pay-TV subscribers to remember and input their user name and password to be authenticated, it has turned out to be a genuine barrier to adoption.
That's why Comcast's announcement yesterday of "Home Pass" which auto-verifies and logs in dual Comcast video and broadband subscriber when accessing Xfinity TV (the company's branded TV Everywhere initiative) is significant. Rather than fumbling for their credentials, users can simply visit the Xfinity portal and begin watching nearly instantly.
Though online video has become a hugely popular source of on-demand video for consumers, it's not the only one available. Pay-TV operators have invested heavily in deploying their own on-demand systems through set-top boxes, which have gained strong acceptance. Comcast, for example, now reports 400 million on-demand sessions per month with about 40K TV show episodes and movies available.
However, when it comes to monetization, there's a significant difference between pay-TV VOD and online video. Whereas online video advertising has developed a robust ecosystem that will drive around $4 billion in revenue this year, pay-TV VOD advertising is nascent, as it has suffered from years of underinvestment.
More recently, though, companies like BlackArrow have developed dynamic ad insertion (DAI) capabilities for VOD, which have been deployed to around 30 million homes. In a fascinating discussion at the June 4th Video Ad Summit, Ashley Swartz from Furious Minds led a deep dive discussion of pay-TV VOD DAI and its relationship to both TV and online video with executives from BlackArrow, Comcast and OMD. For anyone trying to better understand these platforms and their monetization potential, the discussion provides great learning and insights.
The video is below and runs 31 minutes, 22 seconds.
I'm pleased to present the 184th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we discuss the cloud's impact on video delivery. First, I share thoughts on Comcast's X2 platform, unveiled this week, in which the cloud plays a central role.
Colin notes that with Comcast's approach, there is still a fair amount of client-side processing happening, so it's not fully capitalizing on the cloud just yet. Colin draws a distinction between Comcast's approach and that of ActiveVideo Networks (which I recently wrote about), whose CloudTV moves all the processing to the cloud, allowing services to run on older set-top boxes and newer CE devices.
It's still early days in the cloud's deployment with different models at work, but there's no question it's going to become a bigger part of the video delivery landscape.
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Click here to listen to the podcast (19 minutes, 43 seconds)
At the Cable Show yesterday, Comcast's CEO Brian Roberts showed off "X2," the latest generation of its cloud-based X1 entertainment platform. Beyond a slew of UI improvements, X2 offers at least three things that are very important and I believe, indicative of key future trends in video delivery: cloud-based DVR, an inexpensive IP set-top box and a unified cross-platform experience.
Digitalsmiths is taking video metadata to the next level, unveiling its Unified Data Service, a one-stop shop for pay-TV providers to access multiple, pre-integrated data feeds.
Digitalsmiths CEO and co-founder Ben Weinberger explained to me last week that as pay-TV operators have rolled out their own on-demand services and video apps, they're striving to make them as rich as possible. This includes adding the kind of related data (e.g. actor, cast info, schedules, merchandise, etc.) and social tools (e.g. Twitter/Facebook feeds, etc.) that are commonly found in entertainment-oriented web sites and apps.