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
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
LRTV Huawei Video Resource Center
Amsterdam ArenA as an Agile Campus

11|24|14   |   3:31   |   (0) comments


The Amsterdam ArenA, home of the Ajax soccer team, can be a crowded space. ArenA has partnered with Huawei to work on bringing ample bandwidth to 53,000 people at the same time.
LRTV Huawei Video Resource Center
Building a Gigabit Wireless Network

11|24|14   |   3:15   |   (0) comments


3W is dedicated to customer-centric services such as catering, incubator and PR. To do this requires a solid IT structure. In this video, 3W discusses how Huawei has helped to achieve its goals.
LRTV Interviews
The New Wave of IP + Optical Integration

11|21|14   |   04:29   |   (8) comments


At the Alcatel-Lucent Technology Symposium, Heavy Reading senior analyst Sterling Perrin talks about how SDN has reshaped the discussion around packet and optical integration.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 12, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Do You Have a 2020 Vision?
Dennis Mendyk, Vice President of Research, Heavy Reading, 11/21/2014
The New Wave of IP + Optical Integration
Ray Le Maistre, Editor-in-chief, 11/21/2014
Google, AT&T, BT Unite on Network Data Models
Carol Wilson, Editor-at-large, 11/20/2014
Like Us on Facebook
Twitter Feed