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.