CBS Interactive president Quincy Smith, in his role as "cheerleader" and "agitater" for authenticating TV content for cable subscribers' viewing anywhere on demand, said Tuesday that for these initiatives to succeed, they must be done right -- but also soon.
"I happen to agree that it is an inevitability," he said during a panel discussion on the topic of what's being called TV Everywhere and On Demand Online, depending on the purveyor. "The problem is it's diametrically linked to the success in terms of time that it takes [to roll out]."
"The hurdles, at least as we see it, are huge," he continued. So much so that "people start saying things like 2014, which is never a fun date to discuss."
The panel, sponsored by Multichannel News and Broadcasting & Cable, did not include a cable operator, Smith noted. Larry Dunn, the publisher of both magazines, said invitations were extended to executives at Comcast (which is testing what it calls On Demand Online with 5,000 subscribers and a batch of programmers) and Time Warner Cable. One of those operators, he said, had an executive lined up to discuss the topic on the panel but had to withdraw the acceptance after company lawyers objected.
Comcast did have a representative of sorts there: Marty Roberts, VP of marketing at ThePlatform, the Comcast-owned digital media publishing provider that powers the Fancast.com Web site and is supporting the Comcast trial.
He acknowledged that "good, hairy technical problems" are ahead but said "this technology is real, it's in trial, we're learning a lot from it."
Cable operators realize that the Web has upended business models in every other media business, including music and newspapers, and are motivated to make broadband video work as a business extension instead of an enemy, Roberts said.
He also pointed out that even as online video consumption has soared, television viewing keeps growing, though he said that probably has to top out some time.
Multichannel News editor in chief Mark Robichaux, moderating the panel at the Paley Center for Media, asked for predictions on when authentication schemes --- that will let multichannel video subscribers have online, on-demand access to TV shows they are paying for now through their subscriptions -- will be available to more than half the subscriber universe.
Roberts was most optimistic: he said next year.
Smith and Bob Bowman, the CEO of Major League Baseball Interactive Media, said possibly 2011 but no later than 2012.
Bowman said cable operators seem committed to getting the systems in place for their customers. "They just want to do it right," he said. "And so do we. So I think it's moving in the right direction. I hope it's sooner than 2014."
MLBAM is working with Cox, Cablevision and Verizon FiOS TV on authenticating subscribers to view San Diego Padres (via Cox-owned Channel 4) and New York Yankees games (via YES).
Each of those providers has different technology setups to work through, Bowman said, a hint of the complications involved in industrywide initiatives of this kind.
MLBAM was held up several times on the panel for pioneering authentication and paid-subscription models for online viewing: it has about 1 million subscribers to its $100 per year MLB.TV service for watching live, out-of-market games.
Roberts, of ThePlatform, said the good news is all multichannel video providers have a "Web adapter" in their billing systems that provides information about who is a subscriber and what packages they have.
"The bad news is [providers] all have built a different backend system," he said. "So each one is unique. That poses a unique challenge for vendors in the space like ThePlatform."
CBS Interactive's Smith said that in the last 20 days he's seen about 40 different proposals for what authentication or "TV Everywhere" (as Time Warner Inc. calls its initiative) means to individual companies.
"There is no leadership yet, there is no consensus, there are no standards, there are no principles," he said. "It's really going to take some open embracing and some real coordination, not just among multichannel video providers but among the technology constituents."
Also among media buyers, "which is a very important piece," Smith said. Advertisers need to get credit for the views on alternate platforms and have them be considered meaningful.
"The technology has to work and [be] simple," he said. "That's easy to say and impossible to execute."
Providers also need to be willing to try different things, in beta form, rather than working for years to get a perfected, massively deployed system out there all at once.
Will cable providers and content owners expect to be paid extra for the authentication and online distribution service provided? Smith said: "The cable companies so far have been pretty aggressive and adamant, saying they're not going to charge more for the service. So I bow to what the death star says."
"I'm so glad you said that," Bowman quipped.
When an audience member -- analyst Rich Greenfield of Pali Capital -- asked whether CBS would expect to be paid extra for making the content available online, Smith stuck to his line that TV Everywhere provides added value for advertisers, that it expands the business. Other than that, it becomes a question of retransmission-consent payments from distributors, "and I won't answer that," he said.
Bowman said, in general, it's been established, by MLBAM and others, that people are willing to pay to add platforms on which they can access content they want.
Smith also said IP-distributed video can end up being a less expensive way for cable operators to manage content, adding to profit margins. And he said it can be a way to combat the ad-skipping capabilities of DVRs, bolstering ads.
Bowman said the virtual DVR capability built into the YES streaming service doesn't allow for ad fast-forwarding.
A question was raised about bandwidth costs for providers. Smith said those costs haven't fallen in line with Moore's Law along with the growth of online video. Bowman said he doesn't necessarily want those costs to fall -- he wants to see the service get better and better. But Roberts said there have been improvements on the cost side.