Over the past year, “TV Everywhere” offerings
have emerged as the industry’s most notable response to
changes in how consumers use video. Cable operators and
programmers have rapidly expanded the amount of content
they deliver and the number of devices they serve.
Comcast, for example, has more than doubled the
amount of video-on-demand titles available on its various
platforms to 200,000 programs; more than 75,000 of
those offerings are full-length TV episodes or movies.
And there’s more on the way. “In the coming year, we
are going to see real movement in terms of enabling these
[TV Everywhere] experiences,” Marcien Jenckes, senior
vice president and general manager of video services at
Comcast, said. “We are going to see it though technologies
and we are going to see it in rights.”
But as more content makes its way onto more platforms,
a number of problems continue to confront both operators
and programmers trying to expand their TV Everywhere
offerings, according to Jenckes and others.
Consumers continue to complain about a lack of a unified TV Everywhere interface for all devices; confusion
stemming from widely varying digital offerings, in which
content is made available on some platforms, but not others;
and the authentication process that grants them the
right to view specific programs.
Meanwhile, programmers and distributors continue to
struggle with different operating systems that add costs
and complexities to delivering content to an ever-growing
number of devices. Some networks that are particularly active
on the multiplatform front, such as The Weather Channel,
must test their apps on hundreds of different devices.
MANY BUSINESS CHALLENGES
Even thornier problems are evident on
the business side of the equation. Inadequate
measurement of viewing on
mobile devices, disputes over content
rights, pricing for multiplatform delivery,
proper windowing of content, determining
the right ad loads for different
media and the challenge of creating new
revenues to cover the cost of multiplatform
delivery are just some of the issues
raised by operators, analysts and programmers
that could slow the deployment
of TV Everywhere services in 2012.
One key issue is competition, which
is pressuring operators to solve these
problems as quickly as possible. While
over-the-top services have not yet had
a significant impact on pay TV providers,
companies like Amazon, Google,
Microsoft and Apple are looking to aggressively
expand their online video
delivery this year.
Google and Sony may both launch
their own pay TV services using connected
devices — for Google, mobile
phones and tablets using the Android
operating system; in Sony’s case, game
consoles, TV sets or other consumerelectronics
devices.
Meanwhile, pay TV operators have
been jumping into over-the-top delivery
to strengthen their competitive
position. Satellite-TV provider Dish Network is now bundling
its service with a streaming product from Blockbuster,
which it acquired last year. Telco-TV provider Verizon
Communications is reportedly looking to either acquire
Netflix or launch its own national over-the-top service.
The need to satisfy consumer demand for more content
on more devices is also pushing
operators into closer alliances
with potential OTT providers,
according to Howard Horowitz,
president of the research firm
Horowitz Associates.
A number of operators have
begun making streaming-video
service Hulu or Hulu Plus available
as part of their authenticated
products. Several operators
— notably AT&T in 2010, Verizon’s
FiOS TV and Comcast —
have cut deals with Microsoft to
deliver content to TV over the
Xbox game console.
“At trade shows, everyone
loves to talk about cable versus
over-the-top video as a slugfest,”
Horowitz said. “But the consumer
doesn’t see it as a winner-takeall
fight. They just love access to
the content.”
Developing closer alliances
with OTT providers is a smart
way for operators to respond to
that demand, he added.
Though operators and programmers are also forging
closer alliances for multiplatform delivery, many disputes
remain. “Everyone agrees that TV Everywhere is good for
consumers and good for the business,” Horowitz said.
“But implementing that idea raises many issues — licensing
rights, who is going to pay for those rights, advertising
models and so on — that the industry needs to solve.”
IT’S THE ECONOMY
Finding the money to expand TV Everywhere
offerings has also been complicated
by poor economic conditions.
AT&T’s decision to launch its U-Verse
TV service as an all-Internet-protocol
platform has allowed the telco to
quickly offer a number of advanced
services, president of content Dan York
said. That has helped the telco become
the fastest-growing multichannel provider
in the U.S., he said.
But York also cautioned that the
weak economy has limited operators’
ability to raise money to pay for additional
multiplatform delivery rights.
“I think content providers need to
understand that there is a breaking
point for what consumers can afford
and … that the wholesale content pricing
trend is not sustainable,” he said.
Joe Ambeault, director of product
management for Verizon, which has
also been aggressively expanding its
multiplatform delivery and currently
offers more than 10,000 titles on its Flex
View service, compared the current situation
to the earlier debate over HDTV
rights. During those negotiations, operators
balked at demands from programmers
who wanted additional
money for the costs of delivering HD.
“Our stance is that consumers should not have to pay
more for additional access to mobile and online content,”
he said.
Th at means that operators and programmers have to
find ways to cut costs and develop new revenues without
raising subscriber fees, he added.
As part of that effort, Verizon is already working with
programmers to reduce delivery costs by using its own
network and technology to handle IP distribution. It has
also developed some transactional services for electronic
sell-through of content.
“These additional points of content on additional devices
are also additional point-of sale,” Ambeault said.
That dynamic also makes advertising an increasingly
important part of the equation. “As video packets get bigger
and bigger, it is harder for some segments of the population
to afford those packages” and pay for more content
by raising subscriber fees, Comcast’s Jenckes said. “We
have to change that dynamic by doing a better job of monetizing
the content through advertising.”
To help create new revenue, operators are investing
in better VOD ad-insertion systems. Comcast has deployed
dynamic ad-insertion systems to roughly 16 million
homes.
RATINGS A FACTOR
There’s been action on the audience-measurement front
as well. Nielsen now offers C3 cross-platform ratings
for traditional linear TV, video-on-demand, digital video
recorder viewing and online viewing, if the content
contains the same commercial load. Nielsen’s move has
encouraged such programmers as Fox Networks and
Turner Broadcasting System to strike larger TV Everywhere
deals.
Last month, Nielsen also announced it would measure
viewing on the 26 live channels that Verizon FiOS subscribers
can access on Xbox Live game consoles, a development
that played a key role in Viacom’s decision to put
nine channels on Verizon’s Xbox platform.
Nielsen has also filed for a patent for technologies for
measuring tablet viewing, but such measurement could
be a year away. Ratings for viewing on mobile devices —
which pose thornier technological problems — are even
less advanced.
In the meantime, programmers and operators are looking
for alternatives, such as Rentrak’s service for measuring
set-top-box data.
“We continue to work with Nielsen to improve measurement,
but there are some well-known issues with
Nielsen’s panel system and we are also actively looking
at how we can use set-top-box data to improve measurement,”
Comcast’s Jenckes said.
To read the full Viewer Watch 2012 report, please click here. ViewerWatch_Final
