Whether it’s “TV Everywhere,” or something as eye-popping and catchy, the real idea of video today, and the real video-TV revolution, is based on the idea of “choice,” and choice figuratively on steroids. Another term I like for this change is “Ubiquitous Video.”
Putting credit squarely at the feet of Eddy Hartenstein and Bill Butterworth of DirecTV, the No. 1 DBS provider is credited with having opened the door to today’s video choice. The southern-California based company in the hands of these two top execs did this by being the core of the executive and engineering teams, respectively, at DirecTV, who pioneered the transition from analog to digital video when DirecTV officially launched in the U.S. on June 17, 1994.
And they succeeded to the point where today consumers are having choices one would never have dreamed about two decades earlier.
Key to the development of those new choices is the Over-the-Top (OTT)/online video side of the business. Or, in Washington, DC legal/regulatory terms, the Online Video Distributors (OVDs). OVDs are following a new path to deliver quality video in new sizes, shapes, and forms (and prices, or ad-supported), to consumers in lieu of traditional pay TV bundles of bits. These traditional pay TV program bundles are frustrating for consumers because they often involve, in the unique words of Variety reporter, Chris Morris, “bits they don’t want in return for bits they do.”
Yet, there is one key ingredient that I was reminded of at a recent conference. After delivering a speech on the topic of OVDs and what I nicknamed Multichannel Video Program Distributor Wannabees (MVPD Wannabees), a broadcaster in the audience asked, “But who will pay the broadcasters and other content providers their fair share of compensation for the broadcast of their content?”
This, simply put, really is the core message in all of the recent rush to find Aereo and Ivi and other OVD offerings that get around d traditional pay TV bundles, i.e., will the content providers be adequately compensated? Or put another and even more foundational way: do those that create the content get properly paid?
Walk through that core analysis - which is ultimately what a court will end up doing - and if the answer is “yes,” the Sling or Cablevision Remote Storage-DVR (RS-DVR), the new OVD/MVPD Wannabee implementation probably goes through. If not, it likely suffers the current fate of other OVD/MVPD Wannabees, such as iCraveTV, FilmOn, Sky Angel, and Zediva.
It’s ultimately about money, and - under Copyright and FCC dictates — the right negotiated amount for the property owned by the content creator and/or owner. Not surprisingly, in a choice-based capitalist economy, that is the core mantra that guides the development of this Brave New World of video revolution and choice.
Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).