Category: copyright

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…

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.

No man is an island, but will every creator be a channel?

I recall the time back in 2000 that I reached out to David Kelley (creator of “Ally McBeal” and others) about his interest in writing for an internet site, as opposed to his studio at 20th Century Fox TV. In retrospect, I realize how silly that suggestion must have sounded, but it goes to an idea that I am starting to see in every corner of the digital media universe.

In reading this item from Mashable (Kevin Hart, Lionsgate team up for ‘Laugh Out Loud’ streaming service), I thought that there are now creators who have achieved a certain level of distinction which might warrant venturing out on one’s own. Sure, I had thought David Kelley had reached it back in 2000, but now folks like  Kevin Hart and Will Ferrell have launched web channels that stand alone. And it’s not just comedy – there is FiveThirtyEight from polling wunderkind Nate Silver, Nerdist from Chris Hardwick, and so on.

This begs the question, what is the measure of notoriety that would inspire someone to launch their own channel? One interesting microcosm is YouTube. As certain YouTube stars reach incredible numbers of subscribers, I have to ask when they might decide they can do better on their own – with their own video platform, advertising sales force, production facilities, etc. – than relying on YouTube. Certainly, FunnyOrDie is one example, and perhaps PewDiePie will be next (43 million YouTube subscribers and counting).

It seems that Kevin Hart has decided to let Lionsgate handle some of these duties, but the trend of sports leagues illustrates the perils of becoming too reliant on a creator (or copyright holder) for content, when that person or group may decide going it alone is too profitable to ignore. Just look as ESPN’s effect on Disney’s stock price recently. That seems to be the direction that Netflix, Amazon and Hulu are going. I suppose we’ll see…