According to research from The Diffusion Group US cable networks are becoming much more active in regards to online video distribution strategies, even at the cost of straining relationships with their Pay-TV platform partners.
“Cable networks have libraries filled with high-demand video content, but in many cases the content can only be enjoyed via Pay-TV outlets such as cable, satellite, and telco-TV operators. Such is the nature of the licensing agreements now in place,” notes Colin Dixon, senior partner and director of TDG’s broadband media practice. “It is important that, as these carriage agreements are renegotiated, content studios assert their right to establish a credible branded video presence in these emerging conduits, independent of traditional TV operators.”
Dixon notes that, given the amount of money content networks generate from licensing content to Pay-TV operators, they have been reluctant to push too hard for risk of upsetting this long-standing and mutually beneficial relationship. However, new technologies and shifting consumer behaviour are causing content purveyors to re-evaluate the importance of these relationships.
But Pay-TV operators are not resting on their laurels. As report author and contributing analyst with TDG, Pam Allison, notes, “Powerful Pay-TV operators such as Comcast and Time Warner Cable are launching initiatives such as ‘TV Everywhere’ for several reasons, one of which is to offer cable content online to operator-owned portals that can only be accessed by their Pay-TV subscribers. At the same time, powerful TV brands such as ESPN and MTV have no problem ruffling the feathers of these incumbent operators. Many major content developers are creating their own online video outlets and partnering with other online aggregators for distribution. The tension between content owners and distributors is mounting.”