So far, TV Everywhere has been mostly a video-on-demand service, a way for subscribers to cherry pick their favorite shows to watch on second screens. But with CNN and a handful of others leading the way, live-streaming of linear channels is starting to get traction. Even broadcasters are getting in on the act.
TV Everywhere Is Top Of Everyone’s Mind
During the dramatic search for the Boston Marathon bombers in April, CNN saw a massive usage spike, maybe the biggest ever, for its authenticated TV Everywhere live-streaming service.
CNN had recorded other surges on the service since its launch in July 2011, Alex Wellen says, VP of business products and strategy at CNN Digital. “But we’d never quite seen anything like what happened with the Boston manhunt. It had the hallmarks of a story made for CNN and told through technology.”
The experience removed doubts at CNN that TVE streaming was the way to go. “The more we can clarify and connect people with live TV, the better off we are,” says Wellen. “There’s a lot of room for building the awareness and building that connection and we think more and more we’ll recruit users of [TVE]. We think that the time spent will be very high, particularly as people flow between devices.”
Multichannel video programming distributors — aka cable and satellite operators — began launching TVE services four years ago, offering “authenticated” subscribers the ability to receive popular cable programming networks on their tablets and smartphones by downloading an app. The intent was to discourage cord-cutting, which was just beginning to rear its head.
Today, in partnership with programmers like CNN, the top 10 MVPDs (including DirecTV and Dish), some second-tier cable operators, AT&T U-Verse and Verizon FiOS all offer flavors of TVE. They haven’t set the world on fire. After all, pay TV operators were simply giving subscribers another way to access what they were already receiving on their big screens.
But for the most part so far, TVE has been a video-on-demand service, a way for subscribers to cherry pick their favorite shows to watch on second screens. But with CNN and a handful of others leading the way, live-streaming of linear channels is starting to get traction. Even broadcasters are getting in on the act.
“With TV Everywhere, I think the next major move is the out-of-home linear offering,” says Bruce Eisen, president of Digital Advisors, and former VP of online content development and strategy at Dish Network.
Disney/ABC has been early proponent of TVE streaming, offering ESPN, ESPN3, Disney Channel, Disney XD and Disney Junior.
Fox has been streaming the Big Ten Network for a couple of years and Time Warner plans to offer TBS and TNT later this year.
Intrigued by the opportunity to reach mobile devices, three of the Big Four broadcast networks — ABC, NBC and Fox — have said they will offer their O&Os over the platform and encourage their affiliates to do the same. Only CBS remains on the sideline.
“The piece that becomes more important for broadcasters is going to be whatever happens with mobile, the ability to get live broadcast signals on a mobile device,” says Barry Lucas, SVP-research, Gabelli & Co., who has been following the TVE action.
“I think we’re likely to see all of the networks make live TV Everywhere available,” adds Will Richmond, who writes about digital video on his VideoNuze blog. “It’s a way of bringing back some of the live viewership and blunt some of the appeal Aereo is sucking out of the market.”
Aereo is the Barry Diller-backed IP service that is offering all consumers access to signals of local network affiliates for a monthly fee. It has drawn legal challenges from the networks because of its refusal to pay rights fees to them.
ABC got a jump on the other two broadcast networks in May when it began streaming its O&Os in New York (WABC) and Philadelphia (WPVI). An open-access introductory period that runs until the end of June allows anyone with a broadband connection to watch the stations. Thereafter, the live-streaming service will be available only to authenticated cable and satellite customers.
ABC said that its other six stations will join the party later this year. Also later this year, Hearst Television will put its 13 ABC affiliates on the platform.
Disney/ABC’s decision to serve up its stations via TVE stems from the success that it has had with its cable networks. According to the company, authenticated MVPD subscribers have downloaded more than 15 million apps to get the Disney cable networks over the past year.
“While we are still in the very early days, the feedback we’ve received has been very positive and we are working diligently towards increasing distribution of these services in more markets across the country,” says Ben Pyne, president, global distribution, Disney/ABC Television Group.
Mike Biard, EVP-distribution, Fox Networks, says his early experience with the Big Ten Network and TVE has been positive, too.
“Access to local news programming on whatever device is in hand will be huge, but we think sports is the giant killer app for live streaming,” he says.
“During big events, we see usage spikes,” he adds. “It makes perfect sense. We expect we’ll see that carry over as we launch live streaming of other services. But we think sports will be the one where you’ll see that most starkly.”
Cable conceived TVE primarily as a defensive play, as industry leaders including Comcast’s Brian Roberts saw the writing on the screen: Steadily increasing pay TV prices, coupled with the emergence of OTT offerings such as Netflix, Hulu, Roku and, more recently, Aereo, could lure some, maybe a lot, of people away from MVPDs’ more robust but higher cost offerings.
“On the operator side, we have not yet seen them charging incrementally for TV Everywhere,” Richmond says. “I see it less as a new revenue stream than added value to build in retention.”
But what’s in it for the cable networks and the broadcasters? That’s a bit of a riddle.
It’s unclear whether MVPDs are paying the cable networks a premium for the TVE rights, although Joy Sims of the National Cable & Telecommunications Association says that any compensation would “typically be included in the affiliation agreement.”
Broadcast affiliates are hoping MVPDs will be willing to ante up a bit more when they sign their next retransmission consent agreement.
Comcast, the nation’s largest cable provider, will not, according to a spokesperson. But that may simply be an early-stage negotiation tactic.
The other revenue potential for TVE is the extra advertising dollars that expanded viewership on mobile devices would bring.
Right now, there’s no independent third-party measurement system in place that lets MVPDs, networks and advertisers accurately gauge who’s watching what in the mobile world.
But that’s about to change and when it does the cash register may start ringing.
In an effort to identify and mine the advertising revenue in TVE, Disney/ABC and Nielsen are teaming up to include mobile in an ongoing trial of Nielsen’s Online Campaign Ratings (OCR) system.
Nielsen began using the OCR system to measure online viewing 18 months ago. Now, the proliferation of app-enabled mobile devices requires a more sophisticated multi-platform measurement system.
“From an advertising perspective, people want to have a third-party source” to count eyeballs toward ratings, says ABC spokeswoman Karen Hobson. “Ultimately, we feel like that’s going to need to happen. That’s why we’re working with Nielsen on the pilot program.”
Once measurement technology is dialed in, it will open the door for targeted advertising, says Cedric Fernandes, chief technology officer for MobiTV, which provides the tools for such TVE.
“Personalization is going to be a key trend,” he says. “I think cable operators and broadcasters need to adapt to that.”
Lucas cautions that personalized advertising includes some potentially thorny issues.
“Measurement is certainly important,” he says. “The ability to quantify a particular audience — whatever device the content is being used on — certainly from a tech standpoint, I expect, is going to be easy. But there may be a privacy issue.”
Underlying the entire TVE discussion is the question, do consumers really want to watch live linear channels on their mobile devices. The answer appears to be yes, partly because consumers are not necessarily mobile when they watch.
“The notion of mobile I think is a little misunderstood,” says Richmond. Recent studies show that of people who watch video on a tablet, 89% say they do so at home, he says. For smartphones, 63% say they do so at home.
“It happens at home because data rates outside the house from mobile carriers are very expensive,” he says. “They’re moving away from unlimited tiers to capped data plans. To watch a movie on a phone over a carrier network is going to cost you. All of that sort of contributes to peoples’ behavior at home.
Because of the capped data issue, Richmond believes it unlikely there will be much appointment television outside the home, “other than sports.”
Although experience with TVE is scant, many see it as an important way of delivering the oldest kind of TV to the newest screens.
Says Digital Advisors’ Eisen: “The entire TV ecosystem should be aligned on TV Everywhere, whether a basic or premium cable networks, broadcasters or MVPDs.”