Cable Networks Warn of TV Everywhere Failure
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