OTT

Steve Burke, CEO, said today that he was taken aback by the announcements last week that HBO and CBS are offering online-only services that don’t require a cable subscription, he said in an investor call this morning. “I was surprised,” Burke said. “CBS I was surprised because they’ve been such a defender of retransmission consent and the traditional ecosystem and been so successful in the broadcast business. And HBO, because I think it’s going to be such a challenge for them to not cannibalize what is already a really, really good business.”

Streaming services from HBO and CBS don’t signal television’s capitulation to Netflix and the Web; it’s actually the opposite, as the medium expands yet again to gobble up more revenue. “A funny thing happened during the Internet’s seemingly epochal displacement of mainstream media. While digital media was becoming overwhelmingly ad-supported — a mass-media model reminiscent of the three-network era — television gained a subscription revenue stream,” says journalist Michael Wolff.

With two swift strokes, HBO and CBS have opened new doors to a future where you won’t have to pay for a huge bundle of channels to get their TV shows. Now the questions are which networks will follow suit — and how seriously the movement will threaten the highly profitable $80 billion pay TV sector.

Sinclair’s tech guru Mark Aitken urges engineers to make sure they keep their management aware of the threat from OTT video providers. “The broadcast industry really has to unite, at least in a virtual sense, to look at what can we do to become a viable competitor in today’s marketplace,” he says. Advertising dollars have begun to leave the local TV market in favor of new media alternatives, he said. While the shift is small today, if left unchallenged “it will be a sorry state of affairs 10 years from now if we are still around.”

Combining current streaming services including Netflix, Hulu, CBS All Access and the expected price of HBO’s service, which starts next year, would run you about half of the average price of monthly cable and satellite television service. If you’re a sports fan, sorry, the streaming services won’t do it for you alone. But adding an a la carte option to your basic cable subscription might offer you more choice than buying up on the next rung of your cable or satellite service.

For all those cable haters out there, sorry: Cutting the cord won’t mean cutting out your cable provider. They often own some of your favorite channels (Comcast owns NBC Universal, parent of Bravo and USA) and in most areas they are the gatekeepers to the Internet. Offering popular channels like HBO over streaming could actually help cable companies sell more expensive broadband services to customers. “The cable business is evolving from mainly selling you a pay TV package to mainly selling you a broadband Internet service,” says FBR Research analyst Barton Crockett.

Not so long ago, people argued that HBO wasn’t going to unbundle anytime soon, or ever. So what changed?

While all the broadcast networks are working on some form of streaming service, CBS’s version unveiled yesterday is different. It combines its on-demand offerings and station streaming into one service marketed directly to consumers. CBS is creating a whole new revenue stream for itself as well as its affiliates who choose to stream their signals locally on the platform.

The two announcements of online streaming services look to be a big step toward allowing consumers to choose some or all of their TV channels, rather than having fat program bundles forced on them by pay TV providers.

Don’t care to pay for cable? Get ready for a slew of Internet-based TV alternatives promising cheaper service. AT&T, DirecTV, Dish Network, Sony and Verizon are all readying “over-the-top” online video services that bypass the cable or satellite-TV bundle.

While traditional TV networks don’t seem to be moving quickly to higher-quality TV technology, aggressive competition from over-the-top TV-video services — like Netflix, Vudu with more HD content — will push the market.

Whether they realize it or not, the main factor that helps consumers to decide on a new television for video device is the ability to connect — either to the Internet for streaming, or with other members of their family.  According to a study conducted by GfK for the Council for Research Excellence, smart TVs and/or OTT streaming devices were among the top devices selected by households participating in a 50-household qualitative study.

Just last month the telco announced that it forged a partnership with former News Corp. COO Peter Chernin, valued at $500 million, to either buy or build a so-called over-the-top online video service. That’s now potentially the biggest — and perhaps the only meaningful — new opportunity for AT&T if it completes its $49.5 billion acquisition of DirecTV.

A study shows more than 50% of U.S. broadband households now use paid OTT video services, either subscription or transactional. The research firm Parks Associates also notes 37% of consumers 18-24 say online video is their most important video source.

A study shows more than 50% of U.S. broadband households now use paid OTT video services, either subscription or transactional. The research firm Parks Associates also notes 37% of consumers 18-24 say online video is their most important video source.

The future looks like a mash-up of two modes of viewing — a bundle of channels that are streamed via the Internet to any and every screen.

Verizon Communications has bought the remains of Intel Media’s proposed over-the-top pay TV service, OnCue. Terms of the deal were not disclosed, but estimates are that Verizon paid between $200 million and $500 million. The current operation has some 350 employees in Santa Clara, Calif., where Intel Media is based, led by former BBC executive Erik Huggers. The initial plan is to launch the new OTT pay TV service to consumers outside of the footprint of Verizon’s FiOS TV pay TV service, a fiber-optic home broadband service.

Some of the nation’s biggest pay-TV distributors are seeking to secure so-called over-the-top, or OTT, rights from programmers, according to several industry executives. The efforts, if successful, could ultimately clear the way for the demise of the set-top box, which is how multichannel video program suppliers currently deliver content to customers. DirecTV, Time Warner Cable and Charter Communications are among the distributors that have aggressively sought OTTrights.

The online video provider is looking to give TV stations and newspapers a platform to stream live and on-demand video to Roku and other over-the-top devices.

Access to WatchESPN and HBO GO require a cable subscription and HBO subscription, respectively. Sky News gives cord cutters a 24/7 live news stream for free.

Don’t look for Showtime to offer an over-the-top alternative anytime soon. Speaking at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills on Wednesday, CBS CEO Leslie Moonves said: “We like the ecosystem as it is now.” Showtime is a unit of CBS.

What’s the real threat to broadcasters from over-the-top service’s like Aereo? Very little, according to a report from Barclays Capital. “While we tested the Aereo service and thought that it worked well,” writes Anthony DiClemente, media analyst at Barclays, “we think that the overall value proposition of cutting the cord is still not overly compelling.”

Not long ago, video creators looking for wide distribution on TV sets had few options beyond going door to door begging cable companies for what’s known as a hunting license. Now, however, there is another emerging option. Smart and connected TVs and other over-the-top options offer a chance to cut a deal with a Yahoo, Roku or Samsung and launch a content portal via an app or widget.

A new report suggests that TV watching via broadband is on the rise, while devices facilitating over-the-top viewing are gaining more traction. Parks Associates found that 31% of homes with broadband regularly watch TV online.

Global online TV and video revenues will grow five times its current size, reaching $21.52 billion in 2016, from the $3.48 billion in 2010 — this according London-based media research company, Digital TV Research. A big mover here will come from so-called over-the-top (OTT) alternative TV/video providers that use the Internet to act like terrestrial cable operators and/or satellite programming services.

Over the past year or so, dozens of TV stations have begun quietly experimenting with technology that can deliver content to Internet-connected TV sets and conventional TVs linked to the Net through Blu-ray players, game consoles, DVRs and specially designed set-top boxes from Roku, Western Digital and others. These over-the-top (OTT) apps promise to extend their brands and drive revenue.

Media agency MagnaGlobal says over-the-top video services — many of which can be obtained for little or no cost — could grow to just under 10% of all U.S. homes in five years.  By 2016, MagnaGlobal estimates there will be 9 million homes that have video services from so-called over-the-top TV companies — those that use digital, Internet, over the air or other means.

Vimond Media Solutions has added support for connected TVs to the Vimond online TV platform, allowing users to publish services on connected TVs through the use of widgets or TV […]

Stations need to begin streaming their live signals, and to offer streams of past programs, before the future passes them by. The first steps are to fashion a business model and secure the necessary rights from broadcast networks. It’s in the networks’ interest to extend those rights to affiliates, which are still the strongest distribution platform around.

It’s not about the technology used for delivering TV programming; it’s about the viewer’s ability to access the desired programming at the desired time using the most convenient device or platform for that particular moment. TV Everywhere addresses those needs by allowing customers to take their pay TV subscriptions with them, preserving the traditional business model.

So-called “Over The Top” Internet-driven video services are causing bandwidth problems for telcos and IPTV services. The growing OTT service will total $32 billion in revs over the next five years.

CEO Jack Perry says in addition to developing the platform that stations will be able to use to deliver their programming via broadband to interconnected TV sets, tablets and smart phones in their markets, his company is also lining up national programming to supplement whatever programming the participating stations choose to put on the platform. Preliminary testing on stations is slotted for next month, with the goal of a commercial rollout by January’s CES.

The consulting firm launches a practice for delivering video to set-tops, broadband devices.

Stations in each market must band together and share master control and other technical facilities. It’s the key to operating the traditional broadcasting business most efficiently, and to entering the new worlds of mobile and OTT. Locally outsourced and cooperatively operated on a centralcasting model, such Media Processing Centers will empower TV stations to become right-sized and more profitable while implementing new services. For the participating stations, they would replace heavy capital and uncertain maintenance costs with steady monthly payments.

Nearly one-third of urban media consumers watch TV on non-traditional platforms — well over the average for the U.S. Media researcher Horowitz Associates says 31% of city consumers watch TV content on computer/laptops, mobile devices or tablets, or streamed from the Internet to the TV through so-called “over the top” devices, such as Apple TV, Xbox or blu-ray DVD players.