Report: OTT content causing rift between ops, broadcasters
A recent report by The Diffusion Group (TDG) said that providing “any content, anywhere, anytime” is putting a strain on long-standing relationships between cable operators and broadcasters.
While cable operators, including Time Warner Cable and Comcast, are looking at deploying more video content over the Internet to their paid subscribers to combat over-the-top services such as Hulu, they come in direct conflict with some broadcasters who have their own Internet video aspirations.
"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," said 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 said 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 their long-standing and mutually beneficial relationships.
But new technologies and shifting consumer behavior are causing content purveyors to reevaluate the importance of these relationships.
"If Disney can work with Hulu or even go direct via its own Web properties, the value they attribute to a Comcast relationship is lessened. Now imagine how these relationships will be when broadband reaches the TV,” Dixon said.
TDG analyst Pam Allison noted that cable operators aren’t resting on their laurels when it comes to providing their own Internet video platforms.
"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,” she said. “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."
TDG's new report, “Online Video Strategies for Content Providers – Reflections and Recommendations,” looks at the online video strategies of the top-four broadcast networks and a litany of cable networks and online video aggregators, ranging from Comcast's Fancast to Hulu.