Posts for 'LIN TV'

Welcome to November. October was a particularly crazy month with the unfolding financial crisis. Here are 3 key themes.

1. Financial crisis hurts all industries; broadband is no exception

In October the financial crisis was omnipresent. During the month I addressed its probable effects on the broadband industry here and here so I'm not going to spend much more time on it today. Suffice to say, for the foreseeable future, the key industry metrics are financing, staffing and customer spending. Conserving cash and getting to breakeven are paramount for all.

In particular, in "Thinking in Terms of a 'GOTI' Objective" I tried to provide some food for thought about why focus is so important right now. Industry CEOs' jobs have gotten a whole lot harder in the wake of the meltdown; those with the best strategic and financial skills will come through the storm, others will encounter significant challenges.

I'm constantly trying to gauge just how developed the broadband video industry actually is. All kinds of indicators continue to suggest to me that we're still in the very early days. For example, in one post this month comparing iTunes and Hulu, it was evident that iTunes is currently far outpacing Hulu in TV episode-related revenues. Remember that Hulu is the undisputed premium ad-supported aggregator. And that the ad-supported business model itself is predicted by most to eventually be far larger than the paid model. That iTunes is so far ahead for now shows how young Hulu really is (in fact, just celebrating its first anniversary) and how much more development the ad-supported model still has ahead of it.

I think another relevant indicator of progress is how well the broadband medium is distinguishing itself from alternatives by capitalizing on its key strengths. In "Broadband Video Needs to Become More Engaging," I noted that while there have recently been positive signs of progress, overall, much of broadband's engagement potential is still untapped. That's why I'm always encouraged by compelling UGV contests like the one Fox and Metacafe unveiled this month or by technology like EveryZing's new MetaPlayer that drives more granular interactivity. To truly succeed, broadband must become more than just an online video-on-demand medium.

As ISPs, cable operators account for the lion's share of broadband Internet access. Further, their ongoing efforts to increase bandwidth widens the universe of addressable homes for high-quality content delivery. Still, their multichannel subscription-based business model is increasingly threatened by broadband's on-demand, a la carte nature. As delivery quality escalates and consumer spending remains pinched, the notion of dropping cable in favor of online-only access become more alluring.

Yet in "Cutting the Cord on Cable: For Most of Us It's Not Happening Any Time Soon," I explained why restricted access to popular cable network programs and an inability to easily view broadband video on the TV will keep cable operators in a healthy position for some time to come. Still, it's a confusing landscape; this month I noticed Time Warner Cable itself helped foster cable bypass, when in the midst of its retransmission standoff with LIN TV, it offered an instructive video for how to watch most broadcast network programming online. Comcast also got into the act, unveiling "Premiere Week" on its Fancast portal. These kinds of initiatives remind consumers there's a lot of good stuff available for free online; all you need is a broadband connection.

Lots more to come in November, stay tuned.

The latest battle over "retransmission consent" is now underway between Time Warner Cable and LIN TV. These fights crop up periodically, but what's different about this one is that TW is offering instructions to its customers for how to hook their PCs to their TVs so they can view LIN's prime-time programming from the applicable network affiliate's web site.

Time Warner has set up instructional sites, such as http://www.tellthetruthwluk.com/main.phpfor residents of the Green Bay, WI area affected by the outage. Prominently displayed at the site is a 3 minute video with the step-by-step instructions for connecting a PC to a TV. (As a sidenote, the video itself is a great example of a how-to broadband video, but I'd bet that it makes the process look far easier than it is likely to be for most average consumers).

But the all-too-obvious question that I raise: once TW customers get the hookup working, how long will it take them to realize that by bypassing TW's service, some cable network programming can now also be viewed this way, and for free? TW may be inadvertently helping its own customers realize that the $40-$60/month or so they're paying TW may be avoidable.

To my knowledge, this is the first time in these regular retrans flareups involving broadcasters and cable operators (mostly) that broadband has been injected into the mix. In these situations the warring companies usually focus on tactics like LIN offering a $50 credit to consumers to sign up for DISH satellite service or Time Warner handing out over 50,000 free antennas to its customers to receive LIN stations the pre-cable TV, over-the-air way.

But now, with broadband access to prime-time network programs rampant, cable operators have a new tactic to buttress their argument that these broadcast programs are available for free already, so they - and in turn the consumer - should not have to pay for them.

This situation underscores what I've been saying for a while: that broadcast networks' and local affiliates' strategic agendas are falling out of line, as the networks have embraced online delivery wholeheartedly and local stations are left without their historical de facto exclusivity to key prime-time programs.

Of course the root issue here is that local broadcasting is a business built on analog-determined geographic markets. With the advent of digital delivery over the Internet, the networks have increasingly realized that they can go direct to their target audiences. Sometimes they've been friendlier to their local affiliates by giving them some branding or cutting them in on the ad revenues. Yet long-term, the schism between networks and local affiliates seems inevitable. That means that these retransmission fights are bound to only get nastier in the future.

(Note: I'll have Peter Stern, Time Warner Cable's EVP of Product and Strategy on my Nov. 10th Broadband Video Leadership Panel in Boston, "How to Profit from Broadband Video's Disruptive Impact." Click here for early bird registration and information.)

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