Measuring TV Everywhere’s Progress

In 2012, MSOs Seek Headway on Problems That Have Slowed Multiplatform Rollouts

By George Winslow -- Multichannel News, 1/2/2012 12:01:00 AM

Over the past year, “TV Everywhere” offerings have emerged as the industry’s most notable response to changes in how consumers use video. Cable operators and programmers have rapidly expanded the amount of content they deliver and the number of devices they serve.

Comcast, for example, has more than doubled the amount of video-on-demand titles available on its various platforms to 200,000 programs; more than 75,000 of those offerings are full-length TV episodes or movies.

And there’s more on the way. “In the coming year, we are going to see real movement in terms of enabling these [TV Everywhere] experiences,” Marcien Jenckes, senior vice president and general manager of video services at Comcast, said. “We are going to see it though technologies and we are going to see it in rights.”

But as more content makes its way onto more platforms, a number of problems continue to confront both operators and programmers trying to expand their TV Everywhere offerings, according to Jenckes and others.

Consumers continue to complain about a lack of a unified TV Everywhere interface for all devices; confusion stemming from widely varying digital offerings, in which content is made available on some platforms, but not others; and the authentication process that grants them the right to view specific programs.

Meanwhile, programmers and distributors continue to struggle with different operating systems that add costs and complexities to delivering content to an ever-growing number of devices. Some networks that are particularly active on the multiplatform front, such as The Weather Channel, must test their apps on hundreds of different devices.

MANY BUSINESS CHALLENGES

Even thornier problems are evident on the business side of the equation. Inadequate measurement of viewing on mobile devices, disputes over content rights, pricing for multiplatform delivery, proper windowing of content, determining the right ad loads for different media and the challenge of creating new revenues to cover the cost of multiplatform delivery are just some of the issues raised by operators, analysts and programmers that could slow the deployment of TV Everywhere services in 2012.

One key issue is competition, which is pressuring operators to solve these problems as quickly as possible. While over-the-top services have not yet had a significant impact on pay TV providers, companies like Amazon, Google, Microsoft and Apple are looking to aggressively expand their online video delivery this year.

Google and Sony may both launch their own pay TV services using connected devices — for Google, mobile phones and tablets using the Android operating system; in Sony’s case, game consoles, TV sets or other consumerelectronics devices.

Meanwhile, pay TV operators have been jumping into over-the-top delivery to strengthen their competitive position. Satellite-TV provider Dish Network is now bundling its service with a streaming product from Blockbuster, which it acquired last year. Telco-TV provider Verizon Communications is reportedly looking to either acquire Netflix or launch its own national over-the-top service.

The need to satisfy consumer demand for more content on more devices is also pushing operators into closer alliances with potential OTT providers, according to Howard Horowitz, president of the research firm Horowitz Associates.

A number of operators have begun making streaming-video service Hulu or Hulu Plus available as part of their authenticated products. Several operators — notably AT&T in 2010, Verizon’s FiOS TV and Comcast — have cut deals with Microsoft to deliver content to TV over the Xbox game console.

“At trade shows, everyone loves to talk about cable versus over-the-top video as a slugfest,” Horowitz said. “But the consumer doesn’t see it as a winner-takeall fight. They just love access to the content.”

Developing closer alliances with OTT providers is a smart way for operators to respond to that demand, he added.

Though operators and programmers are also forging closer alliances for multiplatform delivery, many disputes remain. “Everyone agrees that TV Everywhere is good for consumers and good for the business,” Horowitz said. “But implementing that idea raises many issues — licensing rights, who is going to pay for those rights, advertising models and so on — that the industry needs to solve.”

IT’S THE ECONOMY

Finding the money to expand TV Everywhere offerings has also been complicated by poor economic conditions.

AT&T’s decision to launch its U-Verse TV service as an all-Internet-protocol platform has allowed the telco to quickly offer a number of advanced services, president of content Dan York said. That has helped the telco become the fastest-growing multichannel provider in the U.S., he said.

But York also cautioned that the weak economy has limited operators’ ability to raise money to pay for additional multiplatform delivery rights.

“I think content providers need to understand that there is a breaking point for what consumers can afford and … that the wholesale content pricing trend is not sustainable,” he said.

Joe Ambeault, director of product management for Verizon, which has also been aggressively expanding its multiplatform delivery and currently offers more than 10,000 titles on its Flex View service, compared the current situation to the earlier debate over HDTV rights. During those negotiations, operators balked at demands from programmers who wanted additional money for the costs of delivering HD.

“Our stance is that consumers should not have to pay more for additional access to mobile and online content,” he said.

Th at means that operators and programmers have to find ways to cut costs and develop new revenues without raising subscriber fees, he added.

As part of that effort, Verizon is already working with programmers to reduce delivery costs by using its own network and technology to handle IP distribution. It has also developed some transactional services for electronic sell-through of content.

“These additional points of content on additional devices are also additional point-of sale,” Ambeault said.

That dynamic also makes advertising an increasingly important part of the equation. “As video packets get bigger and bigger, it is harder for some segments of the population to afford those packages” and pay for more content by raising subscriber fees, Comcast’s Jenckes said. “We have to change that dynamic by doing a better job of monetizing the content through advertising.”

To help create new revenue, operators are investing in better VOD ad-insertion systems. Comcast has deployed dynamic ad-insertion systems to roughly 16 million homes.

RATINGS A FACTOR

There’s been action on the audience-measurement front as well. Nielsen now offers C3 cross-platform ratings for traditional linear TV, video-on-demand, digital video recorder viewing and online viewing, if the content contains the same commercial load. Nielsen’s move has encouraged such programmers as Fox Networks and Turner Broadcasting System to strike larger TV Everywhere deals.

Last month, Nielsen also announced it would measure viewing on the 26 live channels that Verizon FiOS subscribers can access on Xbox Live game consoles, a development that played a key role in Viacom’s decision to put nine channels on Verizon’s Xbox platform.

Nielsen has also filed for a patent for technologies for measuring tablet viewing, but such measurement could be a year away. Ratings for viewing on mobile devices — which pose thornier technological problems — are even less advanced.

In the meantime, programmers and operators are looking for alternatives, such as Rentrak’s service for measuring set-top-box data.

“We continue to work with Nielsen to improve measurement, but there are some well-known issues with Nielsen’s panel system and we are also actively looking at how we can use set-top-box data to improve measurement,” Comcast’s Jenckes said.