TORONTO – For as long as there has been cable television, the subscription has been tied not to the people paying the bills, but to the home, the physical place those people lived.
That’s changing rapidly.
Subscription TV customers are increasingly demanding they be able to take their content with them wherever they want, for viewing whenever they want, either streamed or pulled in on demand. Until very recently this was nearly impossible, but according to David Purdy, Rogers Communications senior vice-president of content, his customers will start seeing a lot more content available for multi-screen on demand viewing in – and beyond – the home. (It’s likely customers of other big BDUs following similar strategies will see a similar content expansion.)
“I think you’re going to see a massive improvement in the overall TV Everywhere offerings this fall. You’re going to find an increase – from Rogers and its competitors – in what we offer live and on demand, in and out of the home,” Purdy told Cartt.ca in an interview after the cable company’s launch of NextBox 3.0, its eight-tuner, low latency, whole home DVR which puts the cable experience on par with Bell TV’s Fibe experience.
So, travelling out of town, can a Rogers customer take their TV with them? “It depends on the content,” he added. “The answer is yes in some cases. We have been challenged by what sports rights we can do that with. Some leagues are very territorial, but my argument is that if you’re a Toronto Maple Leafs subscriber, then you should be allowed to watch the Leafs in Vancouver. I’m not sure the league agrees with me yet.” (Ed note: The NHL is a league Rogers has a vested interest in, given its part-ownership of the Leafs, with Bell.)
“Your entire TV subscription should be able to travel with you wherever you go,” Purdy said, noting that folks travelling (in Canada, no subscription TV viewing can happen outside the country yet unless you have a Slingbox or other setup) could then see their shows via broadband, wireless or WiFi – along with the local ads that make sense for them.
“As long as you’re within Canada, you should be allowed to access the content and (broadcasters) are securing those rights now, for both live and on demand,” he added.
But, when will we be able to take all of our TV with us, farther than the back yard on an iPad?
“It’s percentages,” Purdy explained. “If you look at over the air broadcast content, we have 95% of it available on demand… About 65% of it is available on demand outside of the home and I think that number will grow to about 95 over the next 12 months.
“Now we’re starting to work our way into the specialty channel universe and I think what you’ll start off seeing is about 40% of the content, then 50, 60 and it’ll grow in 10% increments over the next four or five years and it will allow for on demand viewing out of the home… We’ve got deals in place with a couple of different broadcast ownership groups that allow, or call for, a jump-up in the available on demand content. Each year it goes up a little bit. When we did our renewals, it was modest, but it’s growing each year. So, they have to give us, as part of our deal, access to their prime time or most popular specialty channel content; the catch-up rights. The same way we have it for CTV, Global, CBC and City.
“You’ll now start to see that from very popular specialty channels… The ones we don’t have those agreements with, we’re trading paper, exchanging offers, the down and dirty. So all signs are that TV Anywhere and really robust on demand viewing for specialty channels is about to explode this fall,” said Purdy.
ADVERTISING
But with all that on demand TV programming available to subscribers, what about the advertisers who still crave exposure to all those video viewers?
“We’re in discussions with a number of providers right now to allow for dynamic ad insertion in the on demand space,” he said. Right now original ads can be run for seven days within on demand platform viewing and still count towards the ratings. After that seventh day, though, “there’s not real good monetization occurring there right now,” explained Purdy.
“So the idea is to re-insert new ads that would run on that VOD content and those new ads could be generating new revenue streams.”
As for addressable ads, where the same ad spot is sold multiple times so people in different regions – or demographics – are targeted so that they see different commercials? Even though that has been on the horizon for a number of years, Purdy says it really is getting much closer. “People overestimate technology short term and then underestimate it long term,” he explained. “Typically, you work on the stuff for five years, ten years, you get disappointed, you have false starts and then… it becomes a reality.
“This stuff always takes longer than anticipated but I think addressable advertising is definitely about to cross over that threshold and become more real and you’ll see in the States some major announcements. When Comcast joins up and things like that, that’s when it’s achieved critical mass.”
In Canada, 90% of what people watch comes from a vertically integrated company airing it and delivering it. In the States, there is nowhere near the level of integration, so there has been a lengthy tug of war between broadcaster and distributor over who’ll get how much of a revenue split on addressable advertising, says Purdy. “Quite often that tug of war occurs before there is any real revenue to be generated, which slows the progress… Up here, I think we’ll be able to do the trials and experiments because Bell owns Bell Media, Rogers owns Rogers Media, Shaw owns Shaw Media and Videotron owns TVA.
“You could see a world here where addressable ads become a reality because you won’t have that tug of war over who’s getting what percentage of very little money in the beginning,” said Purdy.
"STILL IN THEATRES"
One of the next items on Purdy’s to-do list is to gain access to films still in movie theatres for his on demand platforms. While it’s still early, Rogers did experiment with the Ryan Gosling indie film Only God Forgives, which was available to Rogers customers in July while it was also in limited release in theatres. Despite its non-blockbuster status, it was the most popular title viewed by Rogers customers in the past month, he added.
However, both studios and Cineplex (which owns about 80% of the movie theatre market in Canada) are fearful of gutting their traditional film business by placing brand new movies in MSO on demand libraries. “There is more money for everybody in the food chain to make this happen,” believes Purdy, “I’ve got to convince Cineplex and I’ve got to convince a couple of the studios. We’re highly motivated to crack this.”
Rogers is ready on the tech front with items like forensic watermarking, where any pirated content would be traceable back to the individual customer. It’s just convincing studios to take the plunge – and that this will grow, not shrink, their overall business.
“I think it will appeal to families. My brother has two kids and a wife and a horrendous dog and the notion of them going to the theatre requires military-like logistics to maneuver the whole family, so he’d gladly pay $25 to watch a movie at home,” said Purdy.
A “still in theatres” premium portal in the on demand platform could also be an excellent new showcase for independent and Canadian films which historically do not get much screen time in the big theatres. “We would very much like to experiment with indie films – film releases simultaneously with VOD so we can both take advantage of the press. I think there’s an opportunity there to help the independent or smaller movies,” said Purdy.
