Category: cable television

Where is this all heading?

I’ve been watching with deep interest the progress of various video platforms as they emerge and develop, from YouTube and Netflix to Twitter and DirecTV Now. Here’s a brief rundown of a few of them from eMarketer that should give you an appreciation for the current state of flux, as well as the huge potential for coming disruption in the marketplace.

It seems that first we had simple websites that provided a platform, notably YouTube and Vimeo. Then we saw the TV Everywhere approach from HBO Now, as well as non-cable providers like Netflix, Hulu and Amazon. There’s a move to applications that can provide video content, from sports leagues to Twitter and Facebook. But it is such a tangled web that there is no clear indication as to where it will all shake out.

I suspect that a combination of advertising strength with high-demand content will drive this initially. Those platforms with which advertisers are comfortable (YouTube, Facebook, etc.), and content that is both timely and popular (primarily sports), will be the leaders in the transition that is currently underway. This is a chapter that is very much being written, and companies will rise and fall depending on their ability to forecast and anticipate the trends. But this much continues to be clear: Those who control the rights to this content (sports, awards) will control much of the destiny, and those who must pay for licensing  those rights will face increased price pressure in the coming days (witness ESPN’s effect on Disney stock).

Discuss…

That didn’t take long…

emerge JPEG logo - from Sulmonetti

As I mentioned in my most recent post, the merging of entertainment with devices really signaled the arrival of the digital era, epitomized by the iPod and iPhone. Now, this article just landed, detailing how Sony and the Playstation have been working on getting back into the streaming media mix.

As Variety reports, HBO Now will now be available on the Playstation. I’d be very interested to hear more about the financial arrangement behind this, but if you’re going to be in the console game, you’re going to need content.

Is this the beginning of the end of programming middleman?

It seems that, with every passing day, the importance of traditional content distributors is on the wane. Nowhere is this more stark than the plight of sports programming. As the stock price of Disney continues to fight the inexorable gravity of ESPN’s fate, these kind of comments are exhibit A for the future of not just sports, but all content on the internet:

“The NFL is constantly looking to serve our fans premium NFL content where and how they want to see it,” said Hans Schroeder, senior VP, media strategy, business development, & sales for the NFL.

With the emphasis  now on OTT distribution and mobile devices, the status of ESPN and DirecTV’s NFL package are being seen as bloat. In the past, broadcast networks and cable stations were essential links to the public, today’s growing number of alternatives make these programming middlemen unnecessary. As stated in this article, the leagues can now turn to multiple distributors, such as PlayStation Vue:

“PlayStation Vue offers more than 100 live TV channels. It has deals with programmers including AMC, CBS, Discovery, Disney, Fox, NBCUniversal, Scripps Networks, Turner Broadcasting and Viacom.”

So, instead of set-top boxes turning to ESPN for sports, they can turn to the leagues themselves and eliminate the middlemen (and its accompanying fees) to provide the same experience with added savings. And I would think that it won’t be long before Warner Brothers Television, Alcon Entertainment, and the other myriad scripted content providers completely bypass the networks and just license their wares directly to OTT services, or other online streaming companies.

The shake-and-bake state of the media landscape…

Increasingly, the means of digital content distribution are being revised, altered and shuffled. As this article reports, cable providers are facing reductions in subscribers, and the outlook is not good. So what does this indicate?

It seems that, with every passing day, there is another video platform, phone app, or HDMI plug-in device that promise to wean you off of the exorbitant cable fees that you pay every month. First, it was telecoms, then it was Netflix, Hulu and Amazon, then it was the Roku stick and Chromecast. We are seeing a rapid fragmentation of how we receive video content, and that bodes ill for the traditional distributors.

A few things have transpired recently that hammer this point home. AT&T acquiring DirecTV, ESPN being a drag on Disney stock, Netflix and others producing more original content, and Twitter getting into a content deal with the NBA. This doesn’t even take into consideration the growing popularity of live-streaming, altered-reality gaming, and real virtual reality. As old-timers like myself become less important to the subscriber bases of legacy providers, and advertisers scramble to reach the youth demographic, money and eyeballs will migrate to new means of content delivery.

This is just the end of the beginning, if that. Things are moving very fast in this segment of the media, and a new, transformational technology is likely just around the corner. For now, I’ll go back to my DirecTV and watch some reruns…

One look at the future of digital media… on the sports page!

Being an almost-native Los Angeleno, I have adopted the Los Angeles Clippers as my hometown NBA team (sorry, Lakers). But in this LA Times article from the sports section of the newspaper, I was genuinely surprised to read about their negotiations and plans for airing/streaming their games in upcoming seasons. Their contract with Fox Sports has come to an end, and the new landscape of mobile viewing, digital streaming, and augmented screens have made it potentially much more complicated than in days past.

You really should read the article closely for mention of these considerations, but here is an excerpt which exemplifies the nature of what is involved:

Another possibility would be video streaming the game and the analytical data individually. A third alternative would be integrating the data onto the screen as part of the game feed.

What is conspicuously absent is any mention of virtual reality, which in light of recent acquisitions and investments, lead me to believe will be coming sooner than most expect. And if Time Warner’s awful experience with exclusive deals for both the Dodgers and the Lakers is any indication, I would expect all parties to be very sensitive about unnecessarily restricting viewership.

Finally, the quote I found particularly intriguing is this:

The content for the streaming feed would be produced independent of Fox through a third party.

It’s been my opinion that it was just a matter of time before the professional sports leagues and their owners realized that their share of the advertising revenue would increase substantially if they could provide it without the aid of a middle man. With companies like Facebook and Twitter providing live streaming, the necessity of a Fox or Time Warner falls to the wayside. Granted, at this late stage before the start of the 2016-17 season, it probably doesn’t make sense, but it is most certainly on the horizon.

In fact, the bigger question is whether the leagues themselves, or the owners individually, will become the producers and distributors of games and data. This explains much of the recent stock woes of Disney, which owns ESPN. Stay tuned.

The trouble with advertising in the digital age

I was reading this article in the LA Times about how Hulu is integrating product placement into their programming, and then noticed an ad in the sidebar that was most certainly a function of a condition I have. I don’t talk about it, but have spent some time researching it on the web.

This got me thinking about something I’m sure we have all encountered. If you search for anything, you can bet that ads corresponding to your search will pepper every page that you see henceforth. Have toe fungus? You will see dozens of ads for Jublia and the like. Need a bathroom remodel? Every home improvement store and website will inhabit your web life for days to come.

Granted, there is a desperate effort to find ways to make money on the internet. Music succeeded (if you want to call it that) by licensing to legitimate sites like iTunes and Spotify. But ad blocking software is wrecking havoc on the publishing industry, and the DVR is proving problematic for networks (hence, the article mentioned above). It is also lifting the value of live, must-see programs, especially in sports. Just witness the deals that the NFL and NBA have signed recently.

Advertising is a necessary aspect of free programming, but we are very much in a transitional period where the blunt instrument of banner ads will continue to haunt us in our travels from webpage to webpage, until someone can figure out a way to do it better.

Any takers?

AMC’s chief has it right

I’ve been posting about the relative value of content and its place in the financial landscape of streaming media. One revealing interview was on Charlie Rose a few weeks ago with the president of AMC Networks, Josh Sapan. It is well worth a listen, but it also leads into this particular post.

In a recent interview with MultiChannel News, Sapan expounds on the pricing strategy for the likes of AMC, IFC, WeTV, Sundance and BBC America. It is the age-old adage about supply and demand, and said demand it a function of its importance to the other programs out in the programming universe. He puts it simply:

“We take some comfort in that we have shows that are very important to some people,” he added. “If I was a video retailer I would pay a lot of attention to that.”

Pricing to what the market will bear is standard operating procedure for entertainment, and the article also has some interesting numbers that reveal the perceived value of some channels:

“…affiliate fees range from 13 cents per subscriber per month for WeTV to 40 cents per subscriber per month for AMC. That stacks up against monthly charges of more than $6 per month per subscriber for ESPN and $1.60 for TNT.”

As a dedicated “The Walking Dead” fan – and based on the fan chatter in cyberspace – I suspect AMC may be underselling its channel, but I grant that I am biased. Still, it is an important peek into how cable suppliers look at the popularity of a given channel and decide what the market will bear. It also points to the promise and peril of sports programming. As ESPN can really only license a sports program, they will never have the leverage needed to avoid a bidding war over and given league.

And that’s why owning  content is so crucial in the evolving media landscape.

Content is back to being king!

Media’s love affair with content has been in an ebb and flow for years. But as the means of distribution continue down the path of more choices for less cost, the value of owning content has returned to its throne of supremacy in this digital age. Increasingly, content consumers are choosing their online destination by virtue of where it can get the desired programming.

Once upon a time, the major studios would supply content to the highest bidder, even if that was a direct competitor. Indeed, it was common for Warner Brothers Television and others to supply the spectrum of broadcasters, without regard to who was distributing it. But in this age of Netflix, Hulu, Amazon, etc., owning content takes on greater importance.

That is what makes this Ad Age article particularly enlightening. Clearly, Comcast is pursuing a strategy of owning as much of its content as possible, with its move to acquire DreamWorks Animation.

“Content owners have become increasingly valuable as of late and we could argue Comcast sees potential value in the library of franchises, characters that could be integrated,” said Eric Wold, a B. Riley & Co. analyst covering the entertainment industry.

It is likely that the success of Netflix has been largely a result of its being the sole source of programs like “House Of Cards” and “Orange Is The New Black.” And, apropos of the DreamWorks Animation news, Amazon Studios has been an avid producer of children’s programming.

This is good news for creators, but like everything in entertainment, conditions can change on a moment’s notice, so get while the getting is good, because it may not last. One scenario that I think may be a trend is the sourcing of content via app, as opposed to cable, satellite or SVOD (Subscription Video On Demand).

The game of chicken being played with programming

In what is becoming a common occurrence in the entertainment world, Dish Network avoided a blackout of all Viacom properties (Comedy Central, Nickelodeon, MTV, BET, etc.) with a last-minute deal to secure this critical programming. This is just the latest in a long history of brinkmanship between cable and satellite providers, and the owners of programming.

It went to the bitter end, but Viacom needed a boost to its stock price, and Dish’s 14 million subscribers might make a meaningful dent in its advertiser rates, as well as setting a precedent that might come back and bite it in the you-know-what:

“News of the deal should give Viacom shareholders relief. The stock was up about 5% on Wednesday after Ergen’s comments and soared 9% ($3.41 per share) to $40.70 each in early trading Thursday. Analysts had feared that losing Dish for any length of time would affect future carriage deals with other distributors and set the stage for continued pushback against other content companies concerning the high cost of programming.”

Not that Dish was in the driver’s seat either:

“Dish was also incented to do a deal after losing about 23,000 pay TV customers in the first quarter, a loss that was tempered by gains in the Sling TV service. MoffettNathanson principal and senior analyst Craig Moffett estimated that Dish lost about 158,000 satellite TV customers in the quarter, offset by a gain of 135,000 Sling TV subscribers. Some analysts had predicted that losing Viacom could result in as many as one-third of Dish customers heading for alternative providers.”

This is further proof that there is significant pressure to produce and own programs to avoid these showdowns, and with the advent of new means of distribution, these battles will morph into different battles with new stakes.

This sounds a lot like TV Land…

So, Fullscreen is introducing a subscription service, and in reviewing its offerings, I was struck by how much it sounds like another version of the cable network, TV Land.

The $4.99-per-month subscription will feature scripted and unscripted original content as well as movies and TV shows from the ’80s and ’90s like “Saved by the Bell,”…

My question is, will TV Land compete for these online viewers by simply taking its expertise from cable to the internet? And will this see the start of bidding war for access to old television shows and other content?

Ultimately, it does point to the need for every player to create their own unique content, much like Netflix, Amazon and Hulu are doing now.