CES 2013: Media Companies Know Delivery Methods But Lack Agreements

by | Jan 18, 2013 | Insights | 0 comments

At the Las Vegas Convention Center, the first floor of the North Hall buzzed with the technology of 4K televisions and the on-screen proliferation of every part of life. On the second floor, a series of conferences focused on getting content out through the emerging tech. For the production and distribution networks gathered in rooms N258-N262, the biggest hurdle was rights management and maintaining profit in the digital era. With the technology already prominent and content already available, television companies are under immediate pressure to port an analogue business model into a digital space.

The “Television Ecosystem” panel speakers included: Scripps, A+E, and Turner executives; voices from the distribution end; and reporters of audience measurement via Nielsen ratings. TV Everywhere was present in the room, but not a sure sign of the future. Dan Suratt, EVP of Digital Media and Business Development for A+E Network, stated that the point of TV Everywhere is to “reinforce” the relationship between the consumer and distributor—but that purpose currently lacks an agreed upon economical value. Bruce Eisen, founder and president of Digital Advisors, made the blunt assessment that “no one is making money from TV Everywhere.”

This is the true issue when it comes to moving television online. Viewers exist and most content can be found online, but there is a sizable gap between how the broadcast and cable ecosystem works and how online viewing works. This result is legal online TV viewing is a disconnected experience that few clear advantages over the current spate of illegal streaming and torrent websites.

Apps are channels
Joan Hogan Gillman, EVP of Time Warner Cable, Inc. and President of Time Warner Cable Media.

Online and television are very different ecosystems. With Netflix, Hulu, and Amazon Instant Video, production companies and networks have found new avenues by which to create additional profit while feeding competitors in the online realm. Giving old content to current competitors is nothing new in television as syndication thrives on this system, but internet syndication makes network content available in an ecosystem where networks have little visibility. Right now, the three largest subscription VOD services are provided by brands most prevalent contacted devices. Networks have yet to reach that saturation level; the exception is Hulu, which continues to build up its own content offerings and network strategy.

Content offerings seem to point the best way forward. Multiple times, in multiple panels, the discussion came down to an old maxim: that “Content is king.” Turner and Comcast were both praised for their strategic moves into content creation—because they are sending viewers to their own websites rather than out to services offered by telecom companies. By creating their own content, networks can ensure that people will move to their online offerings.

However, this kind of content creation continues to divide viewers, who have already become more fragmented given the increase in viewing choices, from three major networks to MSOs to online video. So, while content creation does draw viewers to specific telecoms and their networks, it doesn’t provide a profitable way for networks to move their content online.

What seems to be the biggest motivator for the move? Currently, television still has large viewing numbers; and while much has been written about cord cutting, the trend is still so minuscule that it would take a unprecedented snowball effect to scare networks and MSOs. More concern is on “cord nevers,” people 25 and under who have never paid for cable. And there wasn’t a clear solution for this throughout the convention.

The focus of most of these conferences is a preemptive strike against growing trends that have yet to effect TV in a major way. Producers know that a change is coming in some form. But it’s clear that no one is quite sure about how to approach that change.

By Zac Stockton, Product Manager

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