Wednesday, October 19, 2011, 10:05 AM ET
It has been almost 3 years since the term "TV Everywhere" burst onto the scene as the pay-TV industry's response to threats from over-the-top competitors. Yet while TV Everywhere is as tantalizing as ever, it remains a vaguely defined concept and a mishmash of disparate efforts. On the positive side, efforts like HBO GO, WatchESPN, various Turner apps, Comcast's Xfinity TV app and others are already gaining traction and illustrating how valuable TV Everywhere services can be.
However, there's still no consensus in the industry about what TV Everywhere really is meant to be - a new way of viewing programming in-home or out-of-home or both? A new delivery mechanism for live/linear channels or for on-demand archives only or for both? A value-added opportunity to retain subscribers or a new way to generate incremental revenue with additional fees and/or with conventional TV-style ad loads? And so on. Talking to executives throughout the industry and following all of the media coverage I'd suggest there are at least 5 things that are currently holding back TV Everywhere from achieving its full potential:
1. Measurement - Talk to any ad-supported cable network and the first concern about TV Everywhere is that shifting viewership to connected and mobile devices that can't be measured in Nielsen terms is dangerous because it undermines ad sales. TV Everywhere may be great for premium networks like HBO that don't need to worry about ads, but until Nielsen can truly measure and report on non-TV viewing, TV Everywhere won't be fully embraced by the vast majority of cable programmers.
2. Rights - Who has the authority to decide where/how/when a TV program is distributed varies among the studio, producer and network on which the program aired. For older programs this can be even more complicated given the various talent that was involved and that platforms beyond TV were never contemplated. There's no magic wand to wave in order to have wide swaths of programs be available for TV Everywhere except in the rare situations where the network owns the full rights. Often there's a lot of hard work and negotiation involved in unlocking a program for online distribution, all of which takes time and resources.
3. Authentication/infrastructure - In its full implementation TV Everywhere would encompass hundreds of connected and mobile devices, with live and on-demand video running over managed and unmanaged networks. That raises a number of authentication, security, navigation, delivery and other challenges for pay-TV operators who are accustomed to full control over their own infrastructure. On the one hand the Internet creates vast new opportunities to deliver content to subscribers, but on the other it creates huge new risks and unknowns. Pay-TV operators are justifiably cautious about the implementation details of TV Everywhere, with investments in technology and staffing required before being confident in rolling out services. While the biggest pay-TV operators are moving ahead, much of the rest of the industry is looking to learn from their experiences.
4. Business model - From the start TV Everywhere has been pitched as a value-add for subscribers, meaning pay-TV operators felt strongly enough about its impact that they would give it away rather than charge for it. Some ad-supported cable networks agree with this assessment, but others view incremental value as requiring incremental fees, which has led to flare-ups over iPad apps offered by Time Warner Cable and Cablevision. At a time when all content executives are obsessed with how to monetize new online/mobile opportunities, giving new distribution rights without a corresponding increase in carriage fees is anathema. Coupled with the measurement challenges (see above) and considering how complex pay-TV operator-cable network relationships are to begin with means complicated negotiations lie ahead. Update - 1 other nuance to this issue is whether programs are available solely through the pay-TV operators' TV Everywhere app, or also via the cable network's web site/app as some prefer.
5. Competitive urgency - Recall TV Everywhere got started because of fears about over-the-top's insurgency and the risk of cord-cutting. However, there's still scant evidence of actual cord-cutting. Yes, pay-TV operators are losing subscribers, but in the industry this is widely thought to be due to the economy and affordability issues rather than substituting over-the-top services. More recently, Netflix's stumbles are a signal that over-the-top providers are still working through their own issues, and are therefore less worrisome. So while it's still intuitively obvious that providing improved access to subscribers is beneficial, the competitive urgency to do so has certainly lessened. Fear and greed are the best motivators, and it's fair to say the pay-TV industry is less fearful of OTT now than it's been for some time.
No doubt there are other things at work as well, but at a minimum for TV Everywhere to reach its full potential, all of the above need to be fully addressed.
Cable Networks, TV Everywhere