LAS VEGAS – Encouraged by their early results, U.S. broadcasters are diving deeper into over-the-top video and seeking to do more with multiscreen video.
At the NAB Show here last month, top network executives spoke about their Internet video and TV Everywhere initiatives as they explored more ways to extend their brands and stoke new revenue streams. In closed-door meetings with network affiliates, they discussed their strategies for making greater headway in the direct-to-consumer space. (And this was before news of a new Hulu serviced leaked out.)
CBS executives, for instance extolled the virtues of their CBS All Access and Showtime streaming video services at their affiliate board meeting, Although CBS officials have not yet disclosed how many consumers have signed up for the two OTT services, they have said that the OTT video market represents a $800 million incremental revenue growth opportunity for the company over the next few years. They have also predicted that each service could sign up 4 million subscribers by 2020.
“We got an update on how things are going with CBS All Access and from what we were told, it’s tracking right on plan,” said Michael Fiorile, chairman of the CBS affiliate board and CEO of the Dispatch Broadcast Group. CBS All Access gives online viewers access to most current and past network shows, along with access to local stations. CBS gives the affiliates a share of the receipts from the $5.99 per month fee that consumers pay for the OTT service.
At the same time, Disney-ABC Television Group executives discussed the company's new Clearinghouse plan to ease the way for affiliates to make OTT and TV Everywhere deals with DirecTV and Sony’s PlayStation Vue service. They explained that the idea behind Clearinghouse is to enable affiliates to take advantage of rights deals that ABC has already struck with DirecTV and Sony and smooth out any rough technical and financial issues.
John Rouse, executive VP of affiliate relations and marketing for Disney-ABC, said the tricky part is that OTT negotiations can become "a three-legged stool," entailing touchy talks with multichannel video program distributors (MVPDs), the network and the local stations. He noted that getting all three parties on the same page is not quite as easy as it may sound.
Rouse stressed that the program is purely voluntary, enabling stations to “get to market faster and more efficiently,” and has no deadline. He and Emily Barr, chairman of the ABC affiliate board and CEO of Graham Media, agreed that ABC affiliates mostly reacted favorably to the proposal. “You didn’t see anybody coming out of there [screaming],” Rouse joked.
“Advertising should be multichannel, the way content is multichannel.” – Jeremy Helfand, Adobe
Elsewhere at NAB, executives said TV Everywhere services, which have largely languished the past few years, should finally start taking off now because the way that viewers consume video content has dramatically charged. At least, that’s the hope. Speaking on a TV Everywhere panel, they argued that giving viewers the ability to access their pay TV content anywhere, on any device, at any time, has become a basic expectation, not just a nice thing to have.
“I think the [Summer] Olympics is going to be a massive event for [TV Everywhere],” said John Bishop, CTO for Akamai Technologies’ media business. “I think a lot of people are going to be really unproductive at work. People are going to be watching Usain Bolt running at work at 3:30 ET.”
The household penetration numbers for multiscreen video are still not very impressive. In a recent report, Adobe found that only 17% of adult pay-TV subscribers use their service provider's TV Everywhere app, while just 12% engage with the TV Everywhere apps provided by the networks. But, with nearly half of young adults not subscribing to any traditional pay-TV services, making TV Everywhere available isn’t just important, it’s crucial, argued Jeremy Helfand, VP of video solutions for Adobe.
“Consumers now have an expectation to watch what they want on any screen,” he said. He contended that TV Everywhere providers must keep three things in mind – fragmentation, monetization and personalization. He added that all three are especially important for advertisers.
“For advertising to be most effective, there are technological challenges that must be overcome,” he said, pointing to the growing number of video devices and platforms that can be tapped for multiscreen video. “Advertising should be multichannel, the way content is multichannel.”
Colin Dixon, founder and chief analyst for nScreenMedia, said things like dynamic ad insertion and targeted advertising should be high priorities for TV Everywhere purveyors to leverage. “If the ad’s not relevant, consumers hate it,” he said.
Barry Tishgart, VP of Comcast Wholesale, said TV Everywhere players ought to approach each region of the world differently. Unlike in the U.S., where residential pay TV services predominate, he noted, some countries are digital-only and mobile-first. “In some parts of the world, multiscreen viewing surpasses set-top viewing,” he said.
