Video services

Five TelcoTV Takeaways

2:45 PM -- I spent much of TelcoTV on the wrong side of the podium for reporting on what took place there, but some things made a lasting impression on my mental blackboard. Here are five of those:

Who's afraid of OTT? Almost no one. Many TelcoTV providers are looking at over-the-top (OTT) video for the opportunities it can provide, not the threat it poses to pay-TV services. That may be because so many early IPTV providers have found their video products to be profit-challenged and are now looking for video alternatives that OTT can offer. It might be because OTT's popularity will increase the likelihood consumers will buy higher-tiered broadband services. Or it might be because cord-cutting isn't (yet) the biggest challenge facing the TelcoTV audience.

Revenue opportunities go beyond basic video. Keynote speakers Jeff Weber of AT&T Inc. (NYSE: T) and Eric Bruno of Verizon Communications Inc. (NYSE: VZ) drove home this point, but so did Calix Inc. (NYSE: CALX) CEO Carl Russo. Know your customer, look to what consumers want and will pay for, and find new sources of revenue and customer retention. Verizon's Home Monitoring and Control service is one good example of a $10-a-month additional option that won't stress telco resources, but there are many more. (See Verizon's Over-the-Top Home Control , Calix's Carl Russo: Focus on the Customer, and AT&T's Weber: Don't Overlook the Video Basics .)

Sports programming continues to rule. ESPN's Bryan Burns shared some truly awe-inspiring stats on his company's audience: 106.8 million people, ages 12 to 64, engage with ESPN each week, through its TV networks, radio shows, magazine and website, and the average person spends six hours and 35 minutes with ESPN. Multiple speakers also mentioned live sports programming as something that is both driving OTT and preventing some cord-cutting. Burns stressed the fact that one form of viewership doesn't necessarily affect the other. "Mobile usage hasn't decreased viewing of our sports networks," he says. (See ESPN: No Regrets About 3DTV Tilt .)

And we are all paying for sports -- whether or not we watch the games. According to Will Richmond of VideoNuze, the cost of sports programming accounts for 25 percent of the cost of a basic cable package. "About $3 billion a year is being funneled to sports networks from people who aren't necessarily fans," Richmond says. "If you are an entertainment-oriented consumer and don't care about sports, that is a massive subsidy."

He would argue that a viewing package tailored to the non-sports fan, pricing lower, would have appeal.

Multi-screen is certain; the business case isn't. No one doubts that tablets and smartphones are as much a part of the mix today as the laptop and TV, and that connected TVs and game consoles are increasingly as important as set-top boxes. But there is still a hodgepodge of plans for generating revenue from multi-screen -- some advertising-based, some subscription-based and all of it hinging on content rights management.

— Carol Wilson, Chief Editor, Events, Light Reading

COMMENTS Add Comment
cnwedit 12/5/2012 | 4:50:19 PM
re: Five TelcoTV Takeaways

I'm not a DRM expert, but here are the basics as I understand them.

Owning rights to video content for a cable or IPTV service doesn't guarantee you the right to deliver that same content to a smartphone or a tablet - those are separate rights, at least as the content owners see it. Viacom took Cablevision to court over those rights and the two settled out of court.

As for rights to OTT content, many content owners are doing their own OTT play, even if they sell retransmission rights to pay-TV providers, so again the idea is that one doesn't translate into the other. It's a bit of a tangled Web - not unlike things such as baseball game broadcasts. My local radio station, WGN, has the rights to broadcast the Cubs' games over the air but not to deliver its broadcasts via its Internet feed, as MLB sells those separately as part of an annual subscription to its Internet content.

Jeff Weber of AT&T admitted at our conference that content ownership rights dictate what AT&T can deliver over an iPhone and over an iPad - and the two content libraries are different.

sam masud 12/5/2012 | 4:50:19 PM
re: Five TelcoTV Takeaways

Can you elaborate on the issue of DRM and multi-screen video? So much talk of multi-screen, but I'm surprised that content rights still stands out as an issue that needs to be worked...any thoughts on this?

paolo.franzoi 12/5/2012 | 4:50:19 PM
re: Five TelcoTV Takeaways

Interesting...so people still watch the Cubs even knowing that they are going to lose.



PS - A Yankees fan for over 40 years

PPS - 4 more years until the Back to the Future Prediction can be tested!

cnwedit 12/5/2012 | 4:50:18 PM
re: Five TelcoTV Takeaways

I'm quite confident that Theo Epstein will end Cubs' fans long decades of suffering.

Of course I thought the same thing about Dusty Baker....and Lou Pinella.


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