Programmers Are Increasingly Wary of Jeopardizing TV Everywhere Model, Executives Say
TV programmers are increasingly cautious about how they approach deals with new distribution partners and are being careful not to agree to anything that might run counter to the pay-TV industry’s TV Everywhere plans, online and mobile video industry executives said. “Any new distribution outlet has become more challenging because of TV Everywhere,” said Joanne Waage, vice president of strategic media partnership and programming at MobiTV: “What you see are major media companies looking at everything through the lens of TV Everywhere."
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Programmers don’t want to diminish the competitive capacity of their traditional partners, said Brian Baker, CEO of Widevine, which makes digital rights management and online video software used by many online distributors. “Those programmers … are trying to be very careful not to damage the hundreds of millions of revenue they get from the big MSOs,” he said. And the cable operators and other traditional pay-TV distributors are trying to quickly make their services available on more devices, he said. So the programmers are “all working with their traditional customer base to enable their content to be consumed on different devices,” he said. “Mobile is the focus. Android and iPad are the big focus."
The concerns have crystallized in the last year and a half, Waage said. “If tablets had come out a year and a half ago, you probably would have seen greater speed to market of full live TV” on tablet devices, she said. New distributors can still gain access to pay-TV programming, Waage said. “I don’t think anybody is saying ‘you can’t acquire our content,'” she said. But working out rights deals has become more complicated, she said. Making matters more complex, the lines between broadband distribution and mobile distribution are increasingly blurred, she said. TV Networks then “have to go and make that distinction with each of their agreements with whoever produces the content,” she said.
Cable operators need to make their services available on more devices or risk losing out the opportunity created by shifting consumer behavior and distribution methods, said John Prys, director of research at Todd Veredus Asset Management. And until programmers see enough money coming directly from new distributors such as Apple, they will be reluctant to jeopardize their agreement with the large pay-TV operators, he said. “The reason why the iPad hasn’t gotten more video content is content providers don’t see it as a real economic benefit to them,” he said. “The largest installed base of any type of devices is going to be what drives the market for video. It’s not who’s got the coolest device, but who’s got the largest installed base.” For now, that’s the traditional pay-TV industry with their set-top boxes connected to living-room TV sets, he said.
Every pay-TV operator is working on providing online video products to their existing customers, Baker said. “Widevine is working with every other major cable and satellite company in the U.S. on the same type of solution” that Dish introduced this week, he said. “Come the end of the year and the early part of this next, this type of content will be available on a wide variety of non-traditional platforms.”