• CES Takeaway #1: Broadcast TV Networks Were Missing In Action

    (Note: Each day this week I'll be writing about one key takeaway from CES 2011.)

    Broadcast TV networks were conspicuously absent from the buzz of last week's CES 2011, even through one of the main themes of the show was enhanced video viewing through connected devices. Aside from a deal giving boxee the right to sell CBS episodes, and an expected, forward-looking announcement that Hulu Plus would soon be available on Android-powered devices, broadcast TV networks didn't participate in any of the excitement around new connected and mobile devices.

    Their absence was both a missed opportunity, and also a clear illustration of how backward-looking their posture toward connected devices is. At a time when the entire CE industry sees the big prize of untethering video viewing from the living room, while creating boundless opportunities for new interactivity and higher engagement, the broadcast TV networks and Hulu have taken exactly the opposite approach, choosing to block access to their programs by connected devices, even though these programs are already available online.

    I've previously written about the folly of broadcasters trying to force an artificial distinction between computer and TV screens (here and here with respect to Google TV), noting that their motivation for doing so is the pot of gold they see in retransmission consent payments from pay-TV distributors. But while those payments are a bonanza, they shouldn't come at the price of non-participation with connected devices. Indeed, three key things broadcasters risk by shunning connected devices emerged at CES last week.

    First, CE companies lust for high-quality content to help drive device sales. More proof of this came in the highly unusual deal 11 different CE companies did with Netflix last week, giving it a dedicated, branded remote control button. Netflix got this benefit because it embraced connected devices early, recognizing how important they were to its streaming feature. And as Netflix continues supporting the CE industry's goals, it will be showered with more love from device-makers. On the other hand, broadcasters' only toehold with connected devices is a back seat through Hulu Plus, whose content is largely duplicated for free on Hulu.com and on Netflix already. Even as Netflix ascends, broadcasters' own strong brands are currently on a path towards irrelevance in the connected device era.

    Second, at least two product announcements that caught my eye last week underscore how broadcasters' fight to keep streaming to computers and streaming to TVs as two separate, distinct experiences is a losing proposition for both technical and PR reasons. One product, Snapstick, allows users to "snap" programs from their mobile devices or computers to a device attached to the TV. The other, Orb BR, lets users insert a $20 disc into their connect Blu-ray players or PS3 and then access the whole Internet (including broadcasters' online shows and Hulu). If past is precedent, the networks and Hulu will do their best to block Snapstick and Orb BR, and they may succeed. But the point is that instead of embracing all this product innovation - and figuring out how to benefit from it - the networks are playing a silly game of Whac-a-Mole.

    Last, but not least, the harder broadcast networks make it to access their programs via connected devices, the more some people will be tempted to turn to pirate sites, or to move on to more accessible content altogether. On the former point, last week BTIG analyst Rich Greenfield released a head-turning video showing just how easy it's becoming to find pirated video online. Surely the broadcasters don't want to emulate the music industry's experience with piracy, particularly as connected devices proliferate.

    For all of these reasons and more, I continue to believe it's imperative that broadcast TV networks embrace, not shun, connected devices. By using proper windowing (as they've done online), broadcasters should be able to achieve their retrans objectives, while also capitalizing on the new opportunities that connected devices offer for enhanced viewing, discoverability and importantly advertising. The broader point for all content providers is that connected devices are going to matter a lot, and so figuring out how to capitalize on them is critical.

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