Video Distribution Wars Heat Up

Great article from MediaPost's Online Video Insider! Worth reading.

The bottom line - many different distribution strategies aimed to reach the user. Is it a zero sum game or can multiple approaches work. Which one does the user embrace and which don't achieve their full potential. The one thing for sure, digital distribution seems to allow for a lower barrier to entry. Own the content and you can decide which distribution plan to embrace!

The Convergence of Devices and Content

Gary Shapiro, the President of the Consumer Electronics Association, spoke recently at the International Broadcast Conference, assuring the broadcasting industry that they are far from dead. As he notes, change is inevitable and the convergence of viewing devices and content, along with the shift in viewing toward more mobility, brings greater opportunity. He points to devices like the iPhone as examples of this convergence, and also to more viewing choices such as wireless phones, computers, and PDAs.

His most interesting note is to proclaim that the broadcaster has the best direct line to the end user and that they "own the highest value spectrum there is," better than cable, satellite, wireless, and web. Interesting, since most customers that still take their broadcast signal over rabbit ears will have to buy a digital antenna, and perhaps also a new TV set that takes the digital signal. Also, broadcast has not come up with a direct to home device for hi-speed web, relying on phone lines or cable. I argue that this FCC digital transition may lead these remaining non-cable, non-satellite customers to in fact take one of these products and force the broadcaster to rely even more on their relationships with cable and satellite.

Recent ads by cable tout that competition is good and that by them entering the phone business they are bringing healthy competition to the user and thus better pricing options. The triple play by cable companies have in fact been an ideal way to lower churn and retain customer loyalty. They also have the pipeline to interactive content, like VOD, and the convergence of data and video.

At the same time, the FCC transition may also be helpful to competition. Along with a digital antenna and superior signal, comes HD programming directly to the set, without a converter. Niche programmers with an inability to get prime channel line-up space on cable or satellite might consider offering a digital signal and become a broadcaster of their own channel. As Shapiro says, "A single touch of one button and the consumer is instantly dialed in." Still, how the broadcasting industry answers the issue of interaction will have to wait for another day.

CBS interconnects local affiliate sites to its interactive network

While the MTV side of the family employs a decentralized approach to its content and websites, CBS is going at it from an opposite direction and interconnecting its diverse family of affiliates to a central site for content.

I'm kinda partial to the CBS approach. A user looking for CBS content, say Survivor, is likely to utilize search for the show and be pushed to the CBS site. There they can find ways to localize their interest to their local broadcaster. I also think the synergy of a central site allows that user to learn about other shows of the CBS Family. In addition it is keeping the brand value inside the CBS brand. Unlike NBC and Fox's shared site, Hulu, and independent sites like iTunes or YouTube.

It's still about creating a well organized site with accessible search that intuitively understands the user and what they are seeking. It's also about all these sites working together to push the website brand. "Our collaboration with CBS Interactive represents another great leap forward in the evolution and continued growth of our TV stations' digital media initiatives," said Jonathan Leess, digital media group president and general manager, CBS Television Stations. "The expanded integration of CBS Entertainment, News and Sports video content into our sites and, ultimately, the sharing of hundreds of thousands of locally produced, on-demand news clips from our award-winning, local newsrooms truly makes this a win-win partnership."

ESPN Adds Web, Mobile Series

Watching compelling content find its way across multiple devices, including pc and phone, is always exciting. ESPN is the leader in moving content to its audience. They were early to take their tv brand to radio, and the continue to push outward with breadth and depth of content to the web and mobile.

I am most amazed how users are finding this content, not just ESPN, but as more content is created, which shows are most watched and which fall down the long tail. The strength of ESPN is their ability to communicate these choices through their on-air brand and build a synergy to get their viewers to taste their brand in so many different ways. Of course, the final success will be determined by the user, if they find and stay loyal to these new outlets as they have to the TV.

MTV Niche vertical web strategy

MTV is employing a unique strategy creating unique websites that stand alone as content and tie in specifically to its related on-air content. So that for example, The Daily Show will get its own web site as opposed to being a link inside a Comedy Central website. This decentralized approach enables a more targeted experience but may be at a cost of less clicks to get to a site, but more time spent on the site and related content. It also remains to be seen how each of these individual sites connect to each other in such a way to keep the user engaged across other properties.

The bottom line remains the quality and quantity of the assets on each site. The example posted in the article with The Daily Show.com providing links to full shows has great potential for advertising revenue. Given the number of shows already produced, the search mechanism to find shows to watch based on guests, dates, stories, etc will improve usage as well. Its VOD for the web. I love it.

Vudu Brings Movies to TV

Competition is especially fierce in the download to own or rent for movies. In addition to cable's VOD application to watch movies on demand, entrants like Netflix, Amazon, iTune, and now Vudu. So many choices, how will the consumer choose. I believe the following 8 factors will determine which company emerges the leader:

1. Quality of the content - essentially an HD format to match the popularity of the screen.
2. Ease of use - VERY User Friendly
3. Speed - how fast is the availability of the title and will it start immediately
4. Quantity across genres - not just the most popular, but all types from indie to blockbuster
5. Accessible menus and Ease of search - few clicks and offer recommendations
6. Non-disruptive advertising - enough said
7. Extras - DVD like stuff without the DVD - alternate endings, cut scenes, etc.
7. Ability to copy and share across platforms - TV, pc, iPod, Zune, PSP, etc.

The company that does the best job of delivering the above will emerge victorious.

Web to TV Convergence

Content and distribution are continuing to become a very important topic to me. The convergence of technologies and the choices that are being offered now allow content publishers to use new distribution strategies to reach users. One example, noted in the WSJ article cited is Kylin TV, which is offering Chinese programs via a high speed connection from Neulion to the TV set. Others, like Vudu, are offering access to movies to the TV also through a high speed connection. The long tail of programming choices continues to get longer.

On the other hand, Fox Business News went to the well, negotiating basic cable line-up carriage to gain large distribution access. Whether users switch from CNBC or Bloomberg to taste this new channel and decide to switch or stay loyal to the current business source awaits to be seen. In NY, NBC was able to renegotiate carriage of its properties - CNBC, USA, MSNBC, Sci Fi, and Bravo, to position their channels right next to each other on the teen numbers on the Time Warner NYC line-up. That's the Time Square of positions and must have cost a pretty penny! Pushed into the suburbs, A&E, History, and Discovery. The NBC family, as well as Fox Networks are most likely betting that technology will not change fast enough to enable the user to define their own unique channel line-up for their own home. Cable already allows you to set your favorite channels; hopefully these nets recoup their investment before cable enables the user to set up their line-up to their personal liking!

The ultimate winner remains the pipeline. Cable, and now Verizon FIOS, offer the cable line-up and the high speed line through it. Technology through the cable box or via a cableCARD through the TV set brings more entertainment to the TV screen. NBC is banking on all the distribution possibilities - thru the cable line-up, Amazon, and now Hula. It's all coming together and soon the home won't be able to tell where their programming is coming from, through the line-up or streamed from the web.

But be careful, companies like Comcast or Time Warner that own both the pipeline and content are assuring themselves vertical control of the industry, from content creation all the way to the end user.

Time Warner Cable New York slots Fox Business Network as CNBC, Bloomberg TV ramp up

Here is a case where distribution is key. Time Warner Cable in New York City is making changes to its line-up. Fox Business News Channel, a brand new entrant to the cable line-up, has found key positioning on the basic channel line-up, channel 44 for its service, channel 45 for Fox News. CNBC doesn't hurt in this deal, they are on channel 15 with MSNBC next door at channel 14.
And where is Bloomberg...channel 109.

That must have been one heck of a negotiation to get such prime space when most new entrants are lucky today to get VOD, let alone digital carriage. And where are the channels that used to occupy that space ending up.

In this case, distribution is power.

Amazon's Unbox to Sell NBC Shows

As the relationship with Apple and iTunes quickly unravels, another begins, the Amazon unbox store. But what of the user. As the Apple iPod owns the vast majority of portable devices, this new relationship immediately drops all those potential users as well as those that own a mac. What is next in store for NBC to regain those users. As Hulu is not set to release till October, where does the user go to watch NBC shows on their mac and iPod devices. Perhaps that will be NBC's next announcement. As both a mac and iPod user, I am concerned. The one bright spot is the relationship of Amazon with Tivo to watch these shows.

What is missing from all this hoopla is that NBC was also using iTunes to promote its new Fall series with free downloads of its new shows. That marketing strategy appears to be missing from the Apple Unbox announcement. Building loyalty to new series seems key to the rebound of NBC in the ratings race. New shows need to find an audience and this strategy of free downloads helped to build the word of mouth and interest in becoming a regular viewer.