Las Vegas -- Expect TV Everywhere to become virtually everywhere this year -- but in a familiar refrain for ad-supported networks, the industry has yet to solve key issues surrounding advertising models and measurement.
That was the sentiment among industry executives on a panel here Tuesday at CES, the verbosely titled “The Television Ecosystem: Programming, Pay Services, Advertising and Multiplatform Distribution – Revenue and Strategies.”
Jeremy Legg (pictured above), Turner Broadcasting System senior vice president, business development and multiplatform distribution, said that to date “from a general TV Everywhere perspective there haven’t been enough networks” available via TV Everywhere to enter the public consciousness. “That, I think, will come this year,” he said.
The lack of measurement for viewing on tablets and other connected devices is also a huge concern for programmers, said Tamara Franklin, senior vice president of affiliate operations and new media distribution for Scripps Networks Interactive.
“We don’t want to drive audiences to platforms where they won’t be measured,” she said. “It’s incumbent on us to figure out measurement. I hope this is a year of action. We have another 12 to 18 months to get our act together.”
Nielsen is working on measuring viewing across multiple devices, starting with the iPad, said Scott Brown, senior vice president of client insights and strategic relations for the firm. But he wouldn’t provide an estimate on when that would be available to programmers and advertisers, and “I won’t even say when it will hopefully be.”
“It’s an extremely complex business. There are huge issues that make pulling it together in a seamless way a daunting task,” Brown said.
Nielsen has a measurement app for the iPad, but it’s on a distributor-by-distributor basis. The company is looking into other ways to track multiscreen viewing, including a new metering system with a microphone to use automatic content recognition to determine what a Nielsen panel member is watching, Brown said. By late 2013 or early 2014, Nielsen plans to expand its cross-platform sample and capture additional information, he added.
However, even once Nielsen is able to effectively measure viewing across all devices, there remains the issue of how ads will be sold for TV Everywhere relative to traditional television, Legg said. There are “two different ad models for the same content depending on how you’re accessing it,” he said. “How do the CPMs [cost per thousand impressions] align? How does it roll up to the currency?”
In 2013, as more programmers launch TV Everywhere “and this parallel universe builds out, we’re going to have to figure it out soon.”
Today, “nobody is making money from TV Everywhere,” asserted Bruce Eisen, formerly Dish Network’s vice president of online content development and strategy who left the satellite operator to run his consulting firm, Digital Advisors.
While at Dish, Eisen assembled the satellite operator’s online-video portal and services. “No consumer is paying extra for it,” he said. “It’s strictly a loss leader to try to get people to stay in the pay TV orbit.”
But Legg said TV Everywhere enhances the total value of the programming, in the same way HD simulcasts did. “It’s part of the consideration in our affiliate deals,” he said. “TV Everywhere is fungible.”
In either case, Brown said, “Whether TV Everywhere is making money or not, it’s institutionalized in consumers’ minds that you have to pay for content.”
To Dan Suratt, A+E Networks executive vice president of digital media and business development, content discovery for TV Everywhere is the biggest issue. With an online video service, there hasn’t been a lead-in show that drives awareness of new shows, he said.
“There’s no incentive for [an operator] to promote another content pod,” he said. “For us it’s a big, big opportunity for us to create our own distribution platform.”
Last month, A+E launched its first iPad video apps for A&E, History and Lifetime with free access to full episodes of the networks’ original series and struck a TV Everywhere deal with Comcast.
On the subject of Netflix, Eisen called the streaming video service “HBO for the 21st Century.” HBO started with “lousy content nobody wanted,” then moved into exclusive movie output deals and originals. Netflix is following the same trajectory, most recently in outbidding Starz Entertainment for pay-TV window rights to Walt Disney Co.’s movies.
“They’re more akin to a premium network than anything else,” Eisen said.
But the panelists questioned whether Netflix can create a sustainable business in original programming at its current price point. “I don’t think you can create that kind of content for 8 bucks a month,” Franklin said.