Executives at DirecTV have come out and said that they too are in faor of offering their Pay TV programming on the internet and even hinted that it might be for free, as long as viewers are DirecTV subscribers.
The comments made by CEO Chase Carey is clearly a response to last week’s stories that a consortium of US cable operators were trying to find ways in which they could put the content they buy for cable transmission onto the web. DirecTV appears to be in the process of being roped into this deal.
The obstacles in the past have been that content creators have not only blocked such moves, but have put the content online themselves, chasing extra dollars. The cable consortium was trying to find a middle path where both sides are happy with terms, which was achieved by tying online delivery to a pay TV subscription.
It was only natural that other pay TV groups other than cable, in this case the dominant US satellite direct to home service, would want in on the act, and either in fact or in principle have a ‘most favored nation’ relationship with content, so that if content companies offered this through cable they would have to offer it to satellite and IPTV services. If they refused then the FCC would make a fuss and everyone would call their lawyers, so this is going to be an issue of which operation does the best execution and leads the ridiculous situation in the US of online video content being dominated by companies that wish online content would just go away ‘ hardly the environment for innovation.
All Carey said was that he is open to the idea of bringing his subscribers online access to TV shows which are normally not available for free over the Internet.
He said DirecTV felt that web content should be an extension of a customer’s satellite TV viewing experience, not a competing platform. He was speaking at the Deutsche Bank Securities Media and Telecommunications Conference.
What perhaps we all thought would happen is that online content would be created which owed nothing to the major TV studios, and that this would set up new exploitation formats and routes to market for video over the internet. What is happening instead is that companies like YouTube are showing studios where the promise is, and they are simply extending their franchises to take in free internet delivery.
At Faultline we cannot help thinking that the internet will eventually become the primary format for content delivery and in the process new content leviathan’s should emerge which have best understood the new format. For instance right now interactivity is being ignored if we just drop one way content lock, stock and barrel onto the internet.
This week Time Warner CEO Jeff Bewkes announced the formal cable and satellite plan under the name ‘TV Everywhere,’ and said that they may use an existing backend infrastructure supplier like Hulu to power the project.
What they are now after is a full buy-in from both the TV networks and the operators, and it was probably a response to these kinds of overtures that had Carey responding in public.
The way Bewkes described it, it would mean that instead of having a DVR in the home, all the content could be viewed in catch up mode online. Why would you need timeshifting, or indeed placeshifting, if you could get your own favorite programs anywhere in the world (or at least anywhere in the US at first), as long as you had your cable password handy.
The interesting thing is just how this TV Everywhere approach will deal with customers that do not have a pay TV subscription. It is a small step to allow such non-pay TV customers to buy their own subscription ‘ but who would the money go to?
Would it be shared out among the cable and satellite operators and content providers equally? We find it hard to believe that if Hulu suddenly had all this content it could be prevented from selling it to non-pay TV subscribers. If it was, surely that would be a form of anti-trust?
And if subscribers could buy into it directly, that would bring the content companies a new route to market, bypassing the cable operators. So at first such a operation would subsidize cable and satellite operators, but all of that content in a single database, available not only for US distribution, but in the perfect form for opening up to other countries once content rights had been agreed. In fact it would represent an opportunity for all of the US entertainment companies to present a common front to the rest of the world and use it as an engine to promote the same types of service worldwide.
When we first began writing Faultline, it appeared to us that the internet, once fully video enabled, would be a way for a single content owner to sell his wares, not just in one country but globally in one single step.
We presented models of content owners making their content available in a standard format, with standard DRM, not directly to the public, but to etailers the world over, to be integrated into their web services on the fly, and delivered as a white goods online service. In that way every film would have its own CDN and its own web site, as well as an online set of terms that could be discovered and automatically agreed to by other consumer internet destinations.
Progress in that direction has been glacially slow and what we never really appreciated was the extent to which existing content broadcast platforms would dictate online terms. But once all of Hollywood’s entertainment sits on one service, we are a long way towards the technical issues at least being put in place for a global online content market.
Look at the way the internet has developed its advertising. There are very few web sites that are only read in one country. Traffic is monetized, often through advertising or through membership of affiliate networks and these know no national boundaries. How is it that old bricks and mortar content relationships have dictated international content rights in an online world?
Anyway the one thing that cable and satellite will be most careful about is to try to ensure that this content cannot be freely distributed without it having a customer in the loop, initially at least. But there’s no knowing that the FCC or as it goes international, the European Commission, won’t step in and insist that this is available to buy in an online only format. Such a step would put it in the hands of regulators to determine the future of pay TV.
“Everything on television should become available to you on broadband for free,” Time Warner Inc. CEO Jeff Bewkes said at the Deustche Bank conference on Monday. “You can take it with you on a mobile device. You can see it on a PC. You can watch it on your television.” Yes Jeff, as long as we pay you money.