Thursday, March 26, 2009

OnlineSpin: TV Everywhere Might Just Work

Last week Dave wrote "Privacy Protection Is Now A Centrist Issue."

Scott Nelson wrote in response, "Consumers have very well-documented expectations of privacy in the offline world. We as an industry have failed to effectively mirror those online.

By and large, consumers will share information with those entities they know and trust, and expect to be treated differently as a result.

The conspicuously absent parties to this discussion are the merchants (online advertisers) with whom consumers have a relationship.

Third-party technology platforms and ad networks have no equity with consumers.

Leaving the solution to them is why elected officials such as Boucher, Dorgan, Markey, Brodsky, Straus, et al could take this out of control.

Please keep up the noise level, as silence in this case is not golden."

Thursday, March 26, 2009
TV Everywhere Might Just Work
By Dave Morgan

When I first heard about the TV Everywhere concept being promoted by Time Warner's Jeff Bewkes, I was skeptical. In his plan, Time Warner companies that provide content over cable television such as TNT, Cartoon Network and HBO will also offer viewers on-demand access to that same video programming over the Web, but on a protected site that can only be accessed if the viewers are subscribers to that same programming through a cable or satellite television provider. I have never been a fan of walled-garden strategies online, having watched so many of them fail in the mid-1990's, when the "open" Web won out over proprietary online services. Thus, my skepticism.

I've spent some time over the past few weeks pondering the viability of TV Everywhere. After much thought, I have replaced my skepticism for its prospects with guarded optimism. (Full disclosure: I am a shareholder of Time Warner (TWX) and briefly worked for its AOL subsidiary) Here is why:

Narrow focus of initiative. TV Everywhere is first and foremost about protecting the relationship between television programmers and pay-television system operators. Cable and satellite operators pay many billions of dollars per year for the exclusive ability to provide their subscribers with content. If programmers offered viewers unrestricted access to that same content for free over the Web, similar to what some broadcasters do on Hulu, programmers' most important business relationship would be forever undermined.

Doesn't depend on substantial change in consumer behavior. The vast majority of U.S. households already subscribe to pay television services. Thus, using TV Everywhere on the Web (or mobile too, I suspect), will be a simple compliance issue and piggy-backs on an existing subscription. This is not like the efforts of early online services or music companies to establish new consumer subscription services. Certainly, there is a lot of talk these days about consumers bypassing their traditional pay-TV providers and going straight to the Web, but I don't think that mainstream America is going to go that way for some time. This is going to be a long transition, and cable and satellite subscriptions and set-top boxes aren't going away anytime soon.

TV viewing experience doesn't micro-chunk (or commoditize) easily. Whereas newspapers found out that in the open digital world -- where content is easily "micro-chunked" and redistributed -- their individual stories ultimately carried more value than their entire daily package, long-form, studio-produced video content doesn't work the same way. Viewing re-aggregated 30-second snippets does not replace the experience of watching a full season of "The Sopranos."

Do I think that TV Everywhere will become the long-term platform and business model of all studio-produced video content? I don't know. I haven't really thought through all of those issues yet. However, I do believe that TV Everywhere is a smart strategy to preserve critical business relationships and consumer behaviors, while television transitions into a more on-demand and Web-driven vehicle over the next decade. What do you think?

Dave Morgan is the CEO of Simulmedia. Previously, he founded and ran both TACODA and Real Media.

Online Spin for Thursday, March 26, 2009:

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