The “a la carte” TV model... Not If but When!

The pace of industry consolidation as well as the businesses general move towards IP distribution models were never more evident than they were this past week.  On the heels of HBO's announcement of a plan to offer a Web-based service that doesn’t require a cable or satellite TV subscription, CBS announced that it will launch an All Access video-on-demand service that comes with a $5.99-per-month subscriber fee and has current and past seasons available for viewing. Local CBS television station streams will also be available through the subscription in 14 markets.  "It seems pretty apparent that every media company in America is thinking about direct-to-consumer, mobile, digital" said Les Moonves after the announcement.  ReCode also reported that CBS is considering an HBO-like service for its premium network Showtime. “We are always looking at ways of expanding our audience and it is certainly something that we have been examining for some time” said Moonves.

What HBO and CBS have done suggests the future of TV will be messier and more confusing in the near-term but ultimately consumers will have more choice of what they watch and how much they pay for it. No doubt this weeks developments suggests an avalanche of television networks and studios moving quickly to announce online apps and services. Sony, Dish and ABC all have been developing streaming strategies. And in the way that chattering about changing technology helps propel that change, the HBO and CBS announcements, separated by one day, creates a new momentum. Things are going to change even faster now. It’s a sign that the content business is suddenly racing into the broadband space.  MORE: ReCode.net 10/16/14 - Now CBS Is Selling Web Subscriptions to Its Shows, Too 

Is the FCC Redefining Television

The Federal Communications Commission is preparing a proposal which could help the fledgling OTT industry by treating certain online video services like cable and satellite TV providers. The move would help the online services gain cheaper access to major network programming and could allow them to become stronger competitors to the dominant pay-TV providers like Comcast.  Gaining rights to popular channels has been a major hurdle for online TV services. Sony Corp. and Dish Network (as previously reported here) are among the companies considering Web-based services to compete with traditional cable and satellite operators. The big issue and cause for some OTT failures like Intel’s exit from its “OnCue” service, is in securing highly coveted programming from ESPN, NBCU, AMC and others is that the networks typically are owned/controlled by the larger MVPD’s (Comcast, Time Warner, Cablevision).

FCC Chairman Tom Wheeler was asked about the matter yesterday and stated that a proposal is circulating among commissioners “is probably a bit of an overstatement.” Nonetheless the industry analysts are buzzing. “This is a very big deal,” said Richard Greenfield, an analyst for BTIG. “It could pose very significant challenges to the traditional cable TV bundle.” Paul Gallant, with Guggenheim Securities, said in a note today, that broadcasters such as CBS Corp. and 21st Century Fox Inc. would potentially benefit from having more buyers for their programming.

According to an unknown source by Bloomberg, the change would affect online video providers that offer a cable-like programming service on a schedule, and not on-demand services like Netflix, which allows subscribers to watch videos whenever they want. But it could revive the controversial online video service Aereo, which allowed subscribers to watch broadcast TV channels on their computers and Internet connected-TVs.

 

Although for now this may just be chalked up as a rumor, it is one that would have a broad impact on the business as it is today, a  move which could significantly broaden competition in the MVPD market. More: FierceCable 09/30/14 - Rumor mill:Aereo-like platforms may be given program licensing rights by FCC and/or Variety.com09/29/14 - FCC Wants Some Online Providers to be Treated as Cable Operators

Sony Goes Over the Top with Viacom Deal

Sony, like Dish Network and others that we've reported on recently, is developing a broadband-fed services and they took a step closer to reality yesterday as they announced that they had completed a distribution deal that covers 22 Viacom cable channels at launch, as well as access the Viacom's full on-demand package.  In addition to popular services, including BET, Comedy Central, MTV and Nickelodeon, Sony will be able to offer customers access to Viacom’s TV Everywhere websites and apps as well as its full VOD package.  The company first announced its plans to offer pay TV channels over the Internet by the end of this year, and this is a big step in delivering on that promise.  More: Bloomberg.com 09/10/14 - Sony Recruits 22 ViacomNetworks for Internet TV