The company launched back in 2009, before over-the-top video was an entertainment staple of most households. ‘To say we were ahead of the curve is an understatement,’ Skitter founder and CEO Robert Saunders told our partner The Online Reporter, this week.
Saunders said he saw three trends back in 2009 that spurred Skitter. First, he saw that a lot of content was being produced and being put online, second, he saw that people wanted to pay less for pay TV and finally, Saunders predicted that consumers would want to marry TV content with Internet delivered content in one interface.
It’s hard to ignore the fact that video ‘ whether Web video, on-demand content or streaming linear TV ‘ has taken over the Internet and is driving the demand for faster and faster broadband. Saunders pointed to the broadband speed goals the FCC sets. ‘Why provide 100 Mbps for fast email?’ he said. ‘It’s for television and video. We believe this is the trend that the average consumer is going to want to move to: a limited line-up of live linear television, combined with over the top TV.’
Those trends are just now beginning to catch up with Skitter. It partners with rural US broadband providers (Telcos) for something it calls ‘TV as a service,’ in which Skitter acts as a pay TV operator for hire. The company has its own content licensing agreements with some channels, and then it supplements that with OTT services such as Netflix and Hulu. Skitter calls this a converged OTT-IPTV platform. ‘We’re a cable TV company, we’re actually building, owning and operating cable TV installations around the country,’ Saunders said.
Skitter installs and maintains the IPTV network with its partners to deliver the TV service, because it also develops IPTV technology. ‘Since we’re a manufacturer, we own all of the intellectual property,’ Saunders said. ‘We said we’d rather be a partner to Telcos than be selling this equipment to them.’
Skitter is positioned well for an Internet-video future. It found itself ahead of the curve, once again, with respect to streaming TV. ‘We’re one of the original developers of some of the streaming technologies that make live TV over the Internet possible,’ Saunders said. In fact, Skitter won a Telco TV Vision award back in 2010 for its video encoding technologies. ‘We have the lowest bitrate, highest quality video coding technology in the industry,’ he claimed.
Skitter grabbed a few headlines last summer when it launched a direct-to-consumer linear TV OTT service in the Portland, Oregon area. ‘We were trying to deliver off-air TV channels to the greater designated market area,’ Saunders said. He described the launch in Portland as a test market and said the company pulled back on the service subsequently. ‘We got off-sides with the content companies, but we fixed that relationship problem,’ Saunders said.
Skitter’s encoding technology, relationships with telcos across the country and its content licensing experience have positioned Skitter to deliver linear TV over-the-top to subscribers. The company is gearing up to launch the service again, called Skitter.tv, in the next few months, with 80 linear channels that the company can deliver nationally over-the-top.
Skitter.tv, much like Aereo, delivers OTA channels over the Internet to subscribers. Unlike Aereo, Skitter is paying retransmission fees, and it will be available only over the closed lines of its broadband provider partners. ‘We’re different from a lot companies because we believe strongly that content is not free,’ Saunders said. ‘Our goal is to support the content companies so that they can create more content.’
He said Skitter’s OTT product actually serves to expand the reach of rural local stations, which had their signal reach stunted when broadcasters went over to digital TV. Some households in rural areas that were getting snowy analog TV pictures are now getting no TV picture, he said.
Saunders made the case for linear TV existing side-by-side with OTT delivered content. The Internet is great for delivering long tail content and niche content, which have a large market, but not large enough to support a traditional delivery system. ‘I think this is going to be a growing space for OTT,’ Saunders said.
On the other hand, those large and fully entrenched content makers ‘ say HBO, for example ‘ find their pay TV contracts much more lucrative than any OTT offering could be.
‘There are channels that will never go over-the-top, at least not in the near-term’ Saunders said. ‘The large cable and satellite companies are paying billions of dollars to the content licensors for those channel. Why would a content company do something to jeopardize those billions of dollars? They would never do that.’
Saunders point is well taken: any virtual MSO will have a real tough time getting content deals in order to offer that premium pay TV content. In other words, don’t hold your breath for Intel’s over-the-top pay TV service.