Over The Top

The average consumers must be completely
befuddled — if they care at all — about
all the media giants muscling their way into TV
these days.

Last week, Apple took the wraps off a sleek,
tiny set-top, priced at $99, that allows streaming rentals of
shows from News Corp.’s Fox; The Walt Disney Co.’s ABC,
ABC Family and Disney Channel; and BBC America. The
new Apple TV, set to ship this fall, can show rentals of some
7,000 movies for between 99 cents and $4.99, as
well as offer access to Netflix’s streaming-video
service.

Earlier reports noted that Amazon is mulling
a new subscription service for TV content, viewable
on a Web browser, or through Internet-connected
TVs, and Microsoft Corp.’s Xbox 360 video-game
console.

Netflix, not content with its vast library, recently
struck a deal with premium movie channel
Epix worth almost $1 billion, and makes Netflix
the exclusive Web-only distributor of films from
Viacom’s Paramount Pictures, Metro-Goldwyn-
Mayer Studios and Lions Gate Entertainment,
including new releases made available 90 days after their
premium pay TV and on-demand debuts.

And before them, there were TiVo, Sezmi, Roku, Boxee, Xbox
360 and others.

But these players will never “take over TV,” at least not in
the practical way their press releases imply. Th ey will never
duplicate the sheer volume of choice that cable, satellite
and phone companies offer. These “over-the-top” competitors
will always grab a small percentage of the population.
They will always have a willing customer base either dissatisfied with cable operators or just looking for a few good
movies occasionally.

Cable operators are racing to catch up with the latest efforts
for multi-screen viewing, or “TV Everywhere,” which
will open access for paying customers to other platforms.

All the big cable operators say it’s coming. Time Warner Cable,
for its part, has launched an effort to put TV content on
iPads and other devices. It even has a video on YouTube touting
its iPad based TV remote control.

Other pay TV operators promise they’ll deliver
TV shows and programming on whatever platforms
customers want. Witness the “ESPN Everywhere”
provisions of the Time Warner Cable deal last week — but they’ll need to move even faster.

As Todd Spangler points out in this week’s cover
story, cable operators aren’t alarmed
despite the size and financial heft of the TV newcomers.
But they should be concerned.

These new players may not supplant today’s
dominant distribution via cable, satellite and
phone companies. But they will eat away at profits
from the big distributors like so many termites.
Already these services are nibbling away at VOD profits, offering
consumers a richer experience in navigation and depth
of choice.

Cable operators have been slow out the gate to deliver
“TV Everywhere” services, even as others offer various
forms all around.

Customers are waiting, and willing to pay anyone that
can truly deliver on the promise of TV Everywhere.

The question now for TV distributors isn’t where, but
when?