Light Reading
Execs from MTV and Discovery say video Web hubs will sputter if they follow in VoD's footsteps and the ad dollars fail to flow

Cable Networks Warn of TV Everywhere Failure

Light Reading
LR Cable News Analysis
Light Reading
8/2/2010
50%
50%

BALTIMORE -- The Independent Show -- Complaining that video on demand (VoD) has failed to deliver advertising revenue to programmers, executives from MTV Networks and Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK) warned that "TV Everywhere" Websites will fail unless networks can monetize content through ad revenue.

"The one thing we are not as satisfied with as we could be is monetization. I think the promise of VoD would be that we would be able to monetize this content and there would be a business there, but it really hasn’t evolved yet," MTV Networks senior vice president of content distribution Joey Molko said here at a panel last week. (See Major MSOs on Cusp of TV Everywhere Era .)

While Molko noted that The Nielsen Co. 's move to measure on-demand usage through its C3 ratings reports is beginning to help programmers generate revenue through VoD, but expressed concerns that networks would not be able to make much from content supplied to TV Everywhere sites such as Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s Fancast Xfinity TV.

MTV Networks, which distributes popular shows ranging from Comedy Central's South Park to MTV's Jersey Shore, would be reluctant to supply content to TV Everywhere sites unless the industry can come up with an advertising platform that can scale, Molko suggested.

"The extent to which we can monetize it will really drive the extent to which we can embrace it. If we monetize it the exact same way as linear [TV], I think people will be excited about it. If it remains like VoD, I don’t think people will put a large amount of content out there," Molko said.

Discovery Communications SVP of digital media distribution Rebecca Glashow echoed that VoD has been a good product for cable operators and subscribers, but that MSOs haven’t widely deployed dynamic ad insertion platforms that could allow programmers to pay the freight on content they offer on-demand.

"There has not been enough effort into really getting dynamic ad insertion out there in a scalable way so we can all take advantage of what the advertisers find to be a very interesting place to play, and have been disappointed in [during] the last eight years that we’ve been there," Glashow said. Discovery has used VoD primarily to market programming on its linear channels, she added. (See Canoe Boots Up Interactive Ad Campaign and Comcast Gets Dynamic With VoD Ads .) [Ed. note: Canoe Ventures LLC , the cross-MSO advanced ad joint venture has been experimenting with ways to achieve scale with VoD ad-insertion.]

Additional challenges TV Everywhere sites face include finding a simple authentication solution for subscribers and ensuring that the sites are ubiquitous, and contain enough content to satisfy viewers, Malko said. Cracking down on piracy is also important, he added.

If subscribers are able to obtain pirated copies of programs such as South Park, "why would they bother with authentication?" Malko asked.

— Steve Donohue, Special to Light Reading Cable

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
shygye75
50%
50%
shygye75,
User Rank: Light Beer
12/5/2012 | 4:28:14 PM
re: Cable Networks Warn of TV Everywhere Failure


The flip side of "everything everywhere" is "anything anywhere" -- which means large-scale devaluation of any single asset, since there's a wide and deep pool of alternatives to choose from. (For a case study, see the music industry.) Advertising revenues -- the default setting for any shaky business model on the content side -- probably can't support all this... stuff. Wishing won't make it so.

shygye75
50%
50%
shygye75,
User Rank: Light Beer
12/5/2012 | 4:28:13 PM
re: Cable Networks Warn of TV Everywhere Failure


I double-checked my post -- and didn't see anything about printing presses. But for the record, the per-unit price for a copy of The Taming of the Shrew has dropped considerably since its first edition, though sales volumes have increased by orders of magnitude.


Digital content is plentiful. Unmet or underserved demand is minuscule compared with print in the 15th century -- as well as with earlier forms of pre-digital content (records, movies, and TV shows, none of which were easily reproduced). The issue with the story in question is continued reliance on a revenue source -- advertising -- that is not growing as much as it's being stretched thin. If you know of a new business model that can be made to work, there are dozens of content providers who'd love to hear about it.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:28:13 PM
re: Cable Networks Warn of TV Everywhere Failure


 


So what your saying is that the printing press devalued books.


 


seven


PS - If you don't get my meaning, I would argue that it has no bearing on the value of "Premium" content (Shakespeare).  What does happen is effective business models for the new distribution channel needs to occur.  The fact that the old one does not work does not imply that a new one can not be made to work.


 


 

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:28:12 PM
re: Cable Networks Warn of TV Everywhere Failure


As far as I can tell, iTunes has not really impacted the big artists at all.  I think many record labels and lesser artists have had trouble.


Which is what I have been driving at.  Your initial comment was that this devalues content.  I disagree with that strongly.  It definitely changes the value chain involved.  The problem that I have seen here, there and everywhere is that the various players are now in the process of redefining the business relationships.


Let's use the music things as an example.  A digital download costs less money to distribute than a CD.  So, for equivalent sales dollars there is actually more profit available.  BUT, now we have the ability to only download the hot single.  In the past (say the 50s), the music business was dominated by singles.  The album as the primary purchasing concept came later.  So, as an artist and value chain - do you want to publish albums or singles?  What is the best way to capture the value of the asset?  How much is live versus recorded distribution?  What is the role of the label and radio now? 


In the end, if the business model for music dies (and I would have to say based on iTunes downloads alone that this is not obvious) then people will stop making/distributing content on a large scale.  What I think is going on in the record business (and the movie business) is that value chains are shifting (from theatres to DVDs for example).  Organizations that are adept to the changes are going to do well.


Let me use my classic example here.  A very well done video game, lets say the First Dragonage game by Bioware, is a big deal.  Gaming is taking a big chunk of revenue away from traditonal media.  Ever notice that Sony has a foot in both camps?  Is that style of video entertainment the new mode?  Or is it "The Guild" (or Dr. Horrible?)?  Change from Status Quo does not mean death of an industry per se.  It means things are moving.  Now the biggest issue is that this combination of technology and content are unlikely bedfellows.


seven


 

shygye75
50%
50%
shygye75,
User Rank: Light Beer
12/5/2012 | 4:28:12 PM
re: Cable Networks Warn of TV Everywhere Failure


That's nice for Apple, although digital distribution hasn't exactly done wonders for the music business. But we're off point here -- if "TV everywhere" is going to rely on ad revenues for sustainability, as Steve's story suggests, there's less to this model than meets the eye.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:28:12 PM
re: Cable Networks Warn of TV Everywhere Failure


 


iTunes seems to work quite well...and no ads!


 


seven


 

Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed