‘TV Everywhere’ should be revenue driver, not just OTT defence
April 11, 2013
By Colin Mann
Michael Greeson, president of analysis firm TDG, has suggested that operators implementing a ‘TV Everywhere’ strategy have the opportunity to earn revenue from such services rather than treat them merely as a defence against OTT players.
Greeson notes that multi-screen video is centre stage at NAB, as broadcasters have come to realise that (a) consumers have embraced net-connected portable/mobile video platforms, and (b) watching video on these smaller screens is becoming more popular, and quickly so. “This is part of the case for offering ‘TV Everywhere’ or ‘TVE’ services that MVPDs are now rolling out across the country,” he observes.
“This is not news to TDG. In 2009, we first made the case that multi-screen delivery was of interest to consumers and a strategic necessity for operators and networks. This thesis is now widely accepted. However, what was and is not recognised is the legitimate revenue potential that TVE holds; revenue that is being left on the table even as monthly fees increase and consumers are presented with alternative (and fully competitive) services. I’m thinking here not of Netflix but of Intel Media’s forthcoming TV services, full-featured OTT pay-TV services capable of replacing traditional offerings, not just supplementing them,” he says.
During a 2009 interview, GigaOM reporter Chris Albrecht noted the following:
“The Diffusion Group (TDG) [reported that] how we order and pay for video service is likely to change. Right now, consuming video on three screens (TV, PC and mobile) requires three separate contracts at three separate rates. According to TDG, what operators need to do is repackage these separate services into one more-consumer-friendly, all-encompassing video package.
I spoke with Michael Greeson, president of TDG, who said that this video package wouldn’t distinguish between video for your television, online video and mobile video. Instead, it would offer the same video service you get for the TV in your living room and include the same channels on your PC and mobile phone.
Greeson doesn’t think this shift will happen overnight, and large operators…who have all of these capabilities under one roof will benefit most from this strategy. TDG’s survey found that one-fourth of U.S. adult broadband users (roughly 35 million people) would be inclined to sign up for such a video service for a price somewhere between $65 and $105 per month.”
Greeson says that not only did TDG recognise the opportunities inherent in multi-screen strategies years before the industry came around; it also noted strong early interest in a TVE service and a willingness among consumers to pay extra for it. According to 2011 TDG research, 55 per cent of pay-TV subscribers were willing to pay an extra $5 or more per month to get TVE services.
Nonetheless, operators have to date cast TVE in a defensive role; an incentive to keep people from jumping ship to an OTT service. The fact that they took this route was not unexpected. They have a lot of issues to balance, and free TVE access provides a means of enhancing the value of the core home TV subscription during what is expected to be a long period of above average price increases. “Is TVE thus condemned to free, or is there a way operators can transition to a fee-based offering without egg on their face,” ponders Greeson.
His answer: “Most of today’s TVE services are limited to on-demand access, primarily due to the fact that the technology needed to enable and scale a live linear service via broadband was not yet ready for prime time. That is no longer the case, with a number of networks distributing live linear content over the web. This is possible due to recent innovations by companies like iStreamPlanet, with which TDG collaborated to study consumer interest in live linear multi-screen TV streaming services.”
“According to this study, live linear access is a service in which consumers are quite enthusiastic about and for which they are willing to pay a few extra dollars each month. Put another way, having a home TV service delivered live to net-connected video devices is sufficiently compelling to generate additional revenue for operators and networks. Specifically, 61 per cent of pay-TV subscribers are to varying degrees likely to pay an extra $5 per month for a live/live linear TVE service, while 50 per cent are likely to pay $8 or more per month,” he reports.
“Two separate studies, two years apart, and they both point to the revenue potential of TVE. Operators and networks just need a low-risk opportunity to introduce fees for TV, and the addition of live linear ‘broadband broadcast’ may present precisely this opening. They could offer free on-demand TVE, but charge $5 extra per month for live linear access. Seems reasonable to me and to many consumers,” he concludes.