VideoNuze Posts

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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If you've ever used video-on-demand from your pay-TV operator, you no doubt agree that trying to find and then navigate to what you'd like to watch feels like a Soviet-era experience. The problem is the set-top box's processing limitations have hamstrung pay-TV operators from delivering a more web-like VOD experience.

The company looking to change all that is ActiveVideo Networks, and yesterday it got a big boost as Comcast, the largest pay-TV operator in the U.S., licensed ActiveVideo's CloudTV H5 platform for a trial in its Chattanooga, TN market. If the trial goes well and Comcast rolls CloudTV H5 out nationally, the VOD experience is going to dramatically improve for millions of viewers, in turn making it more competitive with web-based OTT VOD providers.

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The intersection of online video and advertising is one of the most exciting corners of the Internet landscape today. Yet despite all the buzz, there are still lots of unknowns. If you need to deepen your understanding of what's working in online video advertising and what's ahead, then join over 300 industry colleagues one week from today, on Tuesday, June 19th, at the VideoNuze Online Video Advertising Summit in NYC.

The Summit will bring together an amazing group of executives from brand advertisers, agencies, content providers, technology companies and others for an immersive day totally focused on online video advertising. There are 40 speakers spanning 18 sessions on virtually every aspect of online video advertising. Expect to come away with insights, research, best practices and new relationships that will help you succeed. And you might even win an $850 Samsung SmartTV, raffled by Jivox!

The Summit is generously supported by Title sponsors Adobe/Auditude and YuMe, plus Adap.tv, The AOL On Network, Collective, Conviva, Eyeview, Innovid, LiveRail, Jivox, Mixpo, TubeMogul, VideoHub, and Videology.

Learn more and register now

At the recent Cable Show, John Holobinko, VP of Strategy for the Network Infrastructure Group of Motorola Mobility, stopped by for a brief video interview. We primarily discuss "nDVR" which Motorola was demonstrating at the show. nDVR allows viewers to record programs and store them in the network/cloud, vs. locally on their own DVRs. The obvious benefit to the viewer is not having to worry about limited storage capacity. In addition, as John explains, nDVR also opens up out-of-home, multi-device on-demand viewing. It also offers operational improvements for the pay-TV operator and new ad opportunities for content providers. Watch the interview below (6 minutes, 6 seconds).

Watch the interview

Since I read Dish Network's press release last month announcing its new Auto Hop feature, I've been scratching my head, wondering (like many others), what Dish's cryptic CEO Charlie Ergen was really thinking about with the move. Auto Hop is such a blatant poke in the eye to broadcasters' ad-based business model that Ergen surely knew it would evoke a legal and business response - as it has.

Therefore, I was hoping an article in last Friday's WSJ, based on the first interviews with Ergen about Auto Hop, would clarify his motivations. While some have called Auto Hop a negotiation tactic with broadcasters over retransmission consent fees (which, in part it is), rather, I think Ergen's larger message with Auto Hop is that the traditional TV ad model is irreparably broken and it's urgent the industry figure out what's next. Not doing so risks the ultimate unraveling of the great American broadcast TV industry.

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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.

Click here to listen to the podcast (22 minutes, 46 seconds)

Click here for previous podcasts

The VideoNuze-TDG Report podcast is available in iTunes...subscribe today!

There are lots of things to be excited about when it comes to online video, but the main appeal continues to be targeting, according to BrightRoll's latest U.S. Video Advertising Report (free to download). Targeting was cited by 43% of respondents as the most valuable aspect of online video (up from 41% in 2011), far outpacing the next favorite attribute of reach (cited by 28% of respondents). All other attributes had 10% or less appeal.

Like 2011, contextual and behavioral again lead in terms of targeting methodologies, with the former cited as most valuable by about 37% of respondents and the latter by 34%. Demographic and geographic trailed. Behavioral targeting will increase by 24% over 2011 with two-thirds of respondents said that over 40% of their ads in 2012 will include behavioral targeting.

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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

Watch the video interview