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CES - Internet TV Panel

by Michael Goodman | Jan 07, 2015

This morning I participated on a panel at CES on Internet TV and its impact on multichannel video providers. As these panels so often do the conversation ranged across a series of topics, including the future of windowing in television, the decline of television viewing, the impact of interactive advertising, and what television will look like in the future. Some takeaways from this panel include the following.

  • OTT video is leading to a democratization of television. In the past, consumers had little choice but to subscribe to what one or two video providers offered. Today, the growth of broadband (fixed and wireless) and connected devices is giving consumers the freedom to choose what they want to view, when they want to view it, on what devices, and even where they want to view it. In addition, these options give consumers more control over what they have to pay than ever before.
  • As consumers video options become more numerous the need for search, discovery, curation and personalization become ever more important. Within the next five personalized, curated content will become the norm, at least in North America and Western Europe. One result of this will be consumers becoming much smarter about how they watch video. Today, it is difficult at best for consumers to find the content they want. And who has the time to search through multiple services and TV apps to find the best value for a movie or TV show. For example, that movie you just rented on Vudu might also be included in Netflix for no additional charge or for free on VOD via your multichannel video provider.  As we move into a world of unified search and discovery consumers will be able to make more informed decisions.
  • Regarding the question of whether consumers are viewing less television the answer depends on how you define the question. If you consider television viewing to only include linear TV then yes television viewing has declined, about 4% YoY according to Nielsen. But television viewing is not just linear TV, the same programming is also viewed via VOD, catch-up TV, DVRs, and SVOD. It is viewed on TVs, smartphones, and tablets. In total, consumers are viewing far more television than ever before.
  • Lastly came the question of content acquisition and the question was posed could windowing survive in an on-demand world where Netflix, Hulu, and Amazon are making entire series available day and date. The answer is yes and no. Not all programming is suitable for windowing. For example, sports programming and reality series are not suited for windowing at all. However, TV series are uniquely suited for windowing and this practice will not go away. Content owners want to maximize the return on their programming the best way to do this is to ensure that they maximize the revenue produced in one release window before allowing it to be shown in another window. Earlier windows have more value and allow content owners to extract greater value from the distribution partners in this period. For provider in later release windows to move up they would have to compensate content owners greatly to make up lost revenue in earlier release windows. A scenario not likely to occur.
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