Posts for 'Cable Networks'

At the recent Cable Show I caught up with Michael Quigley, VP Business Development and Multi-Platform Distribution for Turner Networks. Turner has arguably been the most aggressive of all the cable TV networks in pursuing TV Everywhere distribution, and Michael explain why. Turner has now integrated with 13 different pay-TV operators for TV Everywhere distribution covering 77 million U.S. homes. It also makes authenticated content available on 6 of its networks' sites, with over 500 hours of VOD.

One of the key decisions Turner made was to invest in TV Everywhere before the measurement systems from Nielsen and others were fully in place. That's a risk Michael says Turner was willing to take in order to push the TV Everywhere experience forward and draw other networks in. In the interview Michael also discusses ongoing challenges for TV Everywhere's rollout. Watch the interview below (9 minutes, 46 seconds).

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The WSJ has broken a big story this morning that the Department of Justice is apparently pursuing an antitrust investigation into whether cable TV companies are taking steps to limit the rise of online video usage. The DOJ is primarily looking into the role of data caps, the use of private networks for delivery of certain programming to connected devices, the use of TV Everywhere authentication, and even the model of most-favored nations clauses between cable TV networks and pay-TV distributors.

While it's generally a good thing for the government to keep an eye on how business is conducted (the recent financial crisis demonstrates what happens when it doesn't), to my mind none of these issues are really hurting consumers, yet anyway. Rather, if the government truly wanted to focus on an immediate, huge, and worsening consumer problem in the pay-TV business, it should be focused squarely on sports, and more specifically the multi-billion dollar annual subsidy that non-sports fans are required to pay due to current cable network bundling practices.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 136th edition of the VideoNuze-TDG Report podcast (our podcast's new co-branded name, going forward).

This week we first discuss a fascinating new web site, TakeMyMoneyHBO.com that invites visitors to submit how much they'd pay for a standalone HBO GO service. It's the latest in the larger dynamics around HBO going direct-to-consumer, rather than solely via pay-TV operators. In my video interview with HBO's co-president Eric Kessler 6 months ago, he explained the rationale for HBO sticking to its roots with HBO GO, which Ryan Lawler at TechCrunch enumerated this week. While Colin and I understand the reasoning, we contend that changing consumer expectations and a strong desire for viewing flexibility will inevitably pressure HBO - and others - to re-think traditional approaches. This is a topic I explored at length over a year ago.

Then Colin offers his reactions to E3 and what the major gaming console providers announced with streaming video apps this week. Last I discuss my video interview with top Wall Street analyst Craig Moffett that I posted yesterday, in which Craig states that the TV industry is so "ossified" that re-invention can only come from outsiders.

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At the recent Cable Show, I had the great pleasure of doing a video interview with Craig Moffett, who is SVP and senior telecom, cable and satellite TV analyst at the investment firm Sanford Bernstein. Craig is likely the most widely-followed Wall Street analyst of the pay-TV industry - both video and broadband - and someone whose work I have long respected.

Craig generously spent almost 45 minutes sharing his views on practically every pressing industry issue. A key recurring theme: that the pay-TV industry is so "ossified" and inflexible that true innovation with TV can only come from outside the industry. I have split the interview into 2 video segments below. For anyone who wants to better understand where the pay-TV and online video industries are heading, and what the key drivers are, I highly recommend these.

In Part 1, we discuss:
- Pay-TV industry's overall health
- Why cable isn't really a video business, but rather an infrastructure business
- The truth about cord-cutting and cord-shaving
- What role online original programs will have with younger "cord-never" viewers
- Why young people already think of pay-TV as a luxury service and settle for "good enough" alternatives
- How expensive sports programming is driving pay-TV's affordability challenge
- What will happen with Aereo
- And more

In Part 2, we discuss:
- The role of usage-based pricing by broadband ISPs
- Why the threat of Netflix is far lower today than a year ago
- Nickelodeon's ratings problem and the role of Netflix in creating it
- Whether cable networks will cut back licensing to OTT operators
- What will happen with Dish Network's Auto Hop feature
- Why TV Everywhere will remain on a slow rollout
- What disruptive roles Google and Apple might play
- And more

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If you watch TV programs via VOD from your pay-TV operator, then you've probably had one or both of two curious experiences I've had: either the same, untargeted ad plays repeatedly at the breaks, or no ad (and therefore no monetization for the content provider) plays at all. With over 600 million monthly VOD views occurring these days, the lack of dynamic, targeted ad insertion in VOD diminishes the user experience and leaves lots more money on the table.

There are multiple reasons to explain all of this, but one of the main ones is that there are very hard technology problems involved to solve it, as the pay-TV infrastructure (notably the set-top boxes) vary widely in their capabilities. Creating a platform that runs across pay-TV operators' different infrastructure, at scale, to enable advertising, has been a very tall mountain to climb. Now, after years of hard work and investment, BlackArrow, the company that decided to address the situation, looks like it has finally arrived at the summit.

In this interview at the recent Cable Show, BlackArrow's CEO Dean Denhart explains that the company now has agreements covering 30 million subscribers, with Comcast, Time Warner Cable and Rogers, which are all rolling it out. He walks me through a handful of slides that explain exactly how the BlackArrow system works and the progress programmers, advertisers and pay-TV operators are making. And importantly he discusses how the online video and on-demand TV worlds will converge over time. Watch the interview (15 minutes, 18 seconds)

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Talk to anyone around the online video ad space about key challenges, and the topic of audience measurement - or the lack thereof - quickly comes up. But in an interview I did at the Cable Show with Discovery's Chief Digital Officer JB Perrette, he re-frames the problem as actually not being with measurement itself, but rather that there isn't an accepted "currency" throughout the industry.

As JB explains, the industry is drowning in data, but since everyone has their own, there's no Nielsen-like standard yet to use for buying and selling of online video ads. JB notes Nielsen itself is trying to evolve, but is challenged with its current panel-based measurement approach. JB adds that changing a standard where billions of dollars are at stake takes time, but he's confident eventually it will happen.

JB also discusses Discovery's deal to acquire Revision3 and how Discovery is "buying the capability to develop content across all screens," how marketers are looking for authentic engagement opportunities, why "TV is the last frontier of difficult navigation," and the role that brands play in a world with infinite content choices. Watch the video (13 minutes, 46 seconds).

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Yesterday at the Cable Show in Boston, I interviewed David Preschlack, who is EVP of Affiliate Sales and Marketing for Disney/ESPN Media Networks, and one of the company's point people on its WatchESPN TV Everywhere efforts. As you'll see, David is very bullish on TV Everywhere, calling it the pay-TV industry's "most strategic initiative."

WatchESPN is now available to 40 million U.S. homes, with 8 million downloads to date. David sees customer education as a critical step to broadening its adoption. One key improvement for WatchESPN has been reducing the authentication process from 14 steps 2 1/2 years ago to just 3 steps today. As David explains, the company has also gotten more adept at messaging throughout the process, to help engender subscriber trust. Coming next is WatchDisney, which will offer the company's kids programming on multiple devices for linear and on-demand viewing. Watch the video (8 minutes, 54 seconds).

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There's lots of online buzz right now about an apparently massive amount of online piracy for HBO's hit show "Game of Thrones." To better understand HBO's online strategy with its HBO GO app, I recommend watching the interview I did with co-president Eric Kessler at last November's VideoSchmooze event, which I've re-posted below. This interview is the primary source for a lot of the back-and-forth going on about the GOT piracy issue and what's behind it.

In the interview Eric is very clear in explaining why HBO is focused on maintaining exclusive distribution through pay-TV providers, which means the HBO GO app is only available to HBO/pay-TV subscribers. Coincidentally, this week's podcast touches on how restrictive access to popular programming helps breed piracy.  In this case HBO has rabid GOT fans, but many aren't cable subscribers as Forbes points out, and therefore can't subscribe to HBO. I explained this conundrum back in March, 2011 in "Could HBO be the Next BLOCKBUSTER."

By limiting its distribution, HBO is adhering to a traditional model that still works reasonably well and is very rationale, yet also leaves lots of opportunity on the table and encourages illegal behavior. It's yet another one of the many dilemmas arising as analog era business models collide with digital era distribution realities.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 131st edition of the VideoNuze Report podcast, for May 4, 2012. This week Colin and I discuss how fundamental battle lines have been drawn between the traditional TV ecosystem vs. the numerous digital outlets that are launching online-only original programs. To be more specific, the former group seems intent on erecting ever-higher paywalls to access its programs, which is in turn opening up a gigantic opportunity for free, ad-supported programs to be provided by the latter group. How this battle unfolds will have far-reaching and profound implications for everyone involved.

For the traditional TV ecosystem, there appear to be two core drivers at work; first, the desire by broadcast TV networks to morph themselves into cable TV networks, and second, the role that TV Everywhere is taking on as a foundation of paywall economics.

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HBO announced yesterday that it will offer online access to premiere episodes of its two newest shows, "Girls" and "Veep" to non-subscribers on HBO.com, YouTube, Dailymotion, TV.com, and via distributors' free VOD platforms. "Veep" will also be offered as a free download on iTunes. Access will begin the day after the shows launch on HBO and run for a month. The initiative is savvy on a number of different levels, and continues to show how HBO is tapping new online video opportunities while cautiously adhering to its traditional distribution model.

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I'm constantly on the lookout for data points that provide insights into how viewer behavior may be changing, particularly with respect to possible shifts from traditional pay-TV offerings to new over-the-top (OTT) alternatives.

That's why a client note from the media analysts at Citigroup this week, which highlighted the ratings drop-off that cable TV networks as a group are experiencing, caught my eye. The Citigroup note follows a recent WSJ report explaining that 11 of the top 15 cable networks have lost audience this year, including a whopping 25% decline at Nickelodeon among its kids 2-11. Citigroup said that for each of the last 6 months, cable's total day ratings decline has actually accelerated, from 2.3% last October to 7.8% in March.

Citigroup's main concern about this ratings drop-off is that cable networks' ad revenue growth is slowing as well, in turn pressuring their media company owners' valuations. While that is surely a worry for investors, an even broader issue to consider is whether the drop-off in cable's ratings is the tip of the OTT iceberg, signaling that the explosion of online-delivered alternatives is beginning to impact viewership patterns. While it's too early to conclude this, all of the elements that would drive OTT's rise - at cable's expense - appear to be falling into place.

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Comcast announced on its blog on Friday that it will indeed authenticate HBO GO for use by subscribers with both Xbox and the Xbox Live service. When Xbox initially announced two weeks ago that it was enabling Comcast's Xfinity TV, MLB.TV and HBO GO apps, Comcast (along with Time Warner Cable and Bright House) subscribers were unable to access HBO GO, because the cable operators weren't authenticating it. For Comcast subscribers, that meant the only HBO programs they could view on their Xbox was via the Xfinity app, which offers far less content. The move set off a vocal protest by Comcast/HBO/Xbox subscribers, including a much-noticed Facebook post by Netflix CEO Reed Hastings.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 128th edition of the VideoNuze Report podcast, for April 6, 2012. First up this week we discuss another angle of last week's Xbox video launch - whether Comcast will reverse itself and authenticate HBO GO for its subscribers (as Netflix CEO Reed Hastings wrote openly on Facebook asking Comcast to do). Then we discuss the downturn in March Madness online traffic and the effect of Turner's new paywall.

Last week when Xbox launched a number of new video apps including Comcast's Xfinity, HBO GO and MLB.tv, Comcast made a decision not to authenticate HBO GO for its own subscribers with Xboxes, thereby forcing them to settle for HBO content that's available within its own Xfinity app. As Colin points out, that was a continuation of Comcast's (and other pay-TV operators') policy of not authenticating the HBO GO app for its subscribers using Roku.

A vocal group of Comcast/HBO subscribers with Xbox complained, with Hastings's post getting the most attention. This week, the NY Times reported that Comcast might reverse itself and authenticate HBO GO after all. It's confusing stuff, and Colin and I do our best to explain what might be going on behind the scenes with the balance of power between cable operators and cable networks.

We then discuss news that daily March Madness traffic was down 10% year-over-year, likely attributable to Turner introducing a $3.99 app to view the games for which it had broadcast rights (CBS games were still available online for free). There was a paywall up until a few years ago, when the full tournament went free online, causing an explosion of traffic and ad revenue. Colin and I interpret the new data and its broader implications for TV Everywhere.

(For everyone celebrating holidays, enjoy your weekend!)

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Video ad technology provider FreeWheel added another big content provider to its customer roster yesterday, announcing that it will be powering video ads for a group of NBCU's broadcast and cable networks' properties.

In particular, the deal also covers NBCOlympics.com, the network's destination for the London games this summer. FreeWheel noted that as a result advertisers will be able to make specific digital ad buys and combined broadcast/digital packages, which NBC will be able to deliver. This opens up potential targeting at a more granular level than has been available with traditional TV.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 127th edition of the VideoNuze Report podcast, for Mar. 30, 2012. First up this week we discuss Comcast's controversial assertion that streams from its Xfinity app running on Xbox won't count against subscribers' 250 gb/month data cap because they're running on Comcast's "private network" (note: Comcast has deleted "private network" references in its Xbox FAQ).

Colin argues strongly that this is an inappropriate policy in that it essentially creates a "fast lane" for Comcast's own traffic, while disadvantaging other video streams - basically the same concern raised by net neutrality advocates. Colin makes compelling points about the shared nature of broadband access and the longer-term implications of a "private network" model. For my part, I'm still curious the use case for the Xfinity Xbox app; unless it's used for TVs where a set-top box isn't present, it feels somewhat redundant to what's already available via Comcast's VOD.

Next we turn our attention to this week's mega-deal for the Dodgers. As I wrote yesterday, I think the deal will lead to even higher Regional Sports Network licensing fees, which in turn means even higher subsidies by non-sports fans to make the deal work. This is a problem throughout the pay-TV world, and the new Dodgers owners are betting non-fans will continue to pay ever-higher rates for sports they don't watch. Colin and I discuss the implications for over-the-top services and the pay-TV multichannel bundle.

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This week's eye-popping $2.15 billion acquisition of the Dodgers officially makes Los Angeles ground zero for the most egregiously anti-consumer aspect of today's pay-TV multichannel bundle: the massive annual subsidization by non-sports fans of hyper-expensive sports programming.

This is a topic I have written about previously in "Not a Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year" and "Why Albert Pujols is Over-the-Top's New Best Friend." A confluence of factors, some particular to L.A.'s sports market, is bringing this little-understood issue into the spotlight, in turn raising the question of whether non-sports fans will revolt, seeking out less expensive over-the-top alternatives.

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If, as the WSJ is reporting, Intel is indeed serious about launching an over-the-top TV service later this year to compete against incumbent pay-TV operators, it faces long odds against success. The chip giant would be wading into the same terrain that has enticed Google, Microsoft, Apple, Sony and others. All of these technology companies are justifiably intrigued by the opportunity to disrupt a multi-billion industry rife with inefficiencies, cross-subsidies, inferior living room technologies and crummy user experiences. The problem is none of them can crack the code on how to succeed. Intel is likely to be no different.

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Technology provider RAMP is announcing this morning that ABCNews.com and CNBC.com are now using its web closed captioning solution, and that it has made a number of enhancements in order to better meet the needs of customers. For those not familiar with web closed captioning, the 21st Century Communications and Video Accessibility Act signed in Oct. 2010 mandates that by the end of 2012, all video originally aired on broadcast or cable TV networks, which is then delivered online, must include closed captions.

As RAMP's CEO Tom Wilde explained to me last week, the act has created huge new challenges for TV networks because when captioned on-air video is passed from the broadcast team to the digital team for online delivery, there's no adequate workflow to keep the caption file in synch with the video. The situation becomes even more complicated when a full-length video is sliced up into shorter online-only clips.

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A+E Networks will use FreeWheel's Monetization Rights Management system to manage video ads running against its content consumed on Apple iOS mobile devices, the companies announced this morning. A+E will be able to deploy video ads on its own mobile properties as well as those of third-party syndication partners. FreeWheel gives A+E the ability to manage ad sales rights, forecast inventory, determine ad loads in specific commercial breaks, and monitor performance, among other things.

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