TV Everywhere services that provide online video content to pay-TV customers for no extra charge don't have a clear path to revenue today, said Bruce Eisen, Dish Network's vice president of online content development and strategy.
"I've found most of the networks aren't jumping into this with two feet. For good reason -- there's no business model," said Eisen, speaking at the "TV Everywhere & Anywhere: The Content Connection" event here Wednesday, presented by Multichannel News and B&C.
The No. 2 satellite TV operator launched the DishOnline.com website last month with 150,000 videos, a mix of content free to anyone plus TV episodes and movies available only to paying customers.
"It's a value-add for our customers," Eisen said. "For us, it's pretty much a competitive advantage... I always thought for a long time the MVPDs [multichannel video programming distributors] can own this business -- it's theirs to lose -- and I want to make sure Dish doesn't lose it."
Dish expects to keep enhancing the functionality of TV Everywhere services as a customer-retention tool. For example, Eisen said, the operator is looking to debut features tying interactive TV with DishOnline.com sometime in 2011.
The bulk of the free content on DishOnline.com is from Hulu and CBS's TV.com, Eisen said. Cable network partners providing content for the authenticated section of Dish's TV Everywhere portal include E!, Discovery Communications, Scripps Networks, Starz Entertainment, Epix, Hallmark, Viacom's MTV and Nickelodeon, and Rainbow Media's AMC, IFC and Sundance.
Eisen was part of a panel discussion, "How Does TV Everywhere Affect the Bottom Line?", moderated by B&C business editor Jon Lafayette.
Chris Allen, Starcom USA's vice president and director of video innovation, said on the panel that no advertisers have approached his agency to talk about placing ads on TV Everywhere-style services. "I assume the discussion will begin about how to generate revenue out of that" once TV Everywhere begins to scale, he said.
Still, spending on online video advertising overall is increasing as marketers have started to add online video as part of their media-buying plans, according to Allen. Starcom USA has seen spending on online video ads, which can carry two to three times the cost per impression as traditional TV, double over the past year and the number of brands participating grow from four to 18.
"The majority of our customers want to be associated with television content [online]," Allen said. "But there hasn't been a lot of cable content available to sponsor. As that becomes available we'll chase that down."
One hurdle for advertising on TV Everywhere is the complexity in aggregating viewing metrics across linear, video-on-demand, mobile and online, said Cathy Hetzel, president of Rentrak's Advanced Media Information division.
"To roll that up across operators... we're a ways away from tying all that information together," she said.
Meanwhile, there is still some question how much advertising consumers will tolerate with online video. Allen, in discussing the hope among some programmers of adding TV Everywhere views into Nielsen's C3 ratings, said he didn't think people would sit through "eight minutes of ads in 22 minutes of content."
As for whether TV Everywhere is aimed at reducing the threat of "cord-cutting," Eisen said it has already helped. "We've actually received e-mails from users saying, ‘DishOnline is great. I was going to drop you and go with Hulu and Netflix,'" he said.
When broadcast networks make shows available for free online the day after they air, they're setting a damaging precedent, Eisen said. "I personally think that's bad for this building," he said, alluding to the Academy of Television Arts & Sciences Plaza in North Hollywood, where the event was held. "That sets the expectation that the consumer doesn't have to pay for the content."
But today, any cord-cutting that is happening is marginal. Rentrak, for example, has found that increasing the availability of programming across more platforms only increases the amount of overall viewing, Hetzel said. "In every single case, [programmers] got viewers they would not have gotten otherwise."
Allen added: "It's going to be years before we see cord-cutting at a substantial threshold that we have to be worried about. But online is where people are increasingly going first."