3 Comments

Summary:

Recent reports could make you think that Apple, Sony and Google are all getting ready to launch their own pay TV services any day now. Time for a reality check.

Judging from some of the headlines of the last couple of days, it looks like the future of television is just around the corner.

First, news broke that Sony struck a preliminary agreement with Viacom to carry the company’s cable channels as part of an online pay TV offering. Then, Google CEO Larry Page reportedly met with folks from the NFL to discuss bringing the league’s Sunday Ticket to YouTube or an upcoming Google TV service.

Just a few days later, ESPN acknowledged that it has had preliminary talks with companies looking to start online TV subscription services. And for a good measure, new rumors about Apple building a TV set, complete with access to content from HBO, ESPN and others, started bubbling up as well.

Judging by the pace of these revelations, one would have to assume that a bunch of new services set to disrupt the traditional TV distributors are ready to go to market tomorrow. But the reality looks a little different. I’ve been told by people in the know that many of these conversations are very general in nature, and that many of the companies reportedly working on their own online pay TV services aren’t even close to getting the content deals needed to get these kinds of ventures off the ground.

Some of the reports this week acknowledged as much, with ESPN President John Skipper telling Bloomberg that talks were merely “exploratory,” and AllThingsD’s Peter Kafka writing that the NFL Google meeting was just an “informal chat.” Of course, these informal chats have been happening before, as everyone is having meetings with everyone all the time to explore possibilities.

So why is all of this bubbling up now?

There are two reasons: One is that the launch of an internet-based pay TV offering is increasingly becoming inevitable. Intel fessed up to its plans to launch a TV service back in February. The company hasn’t shared a lot of details about the service, but said that it intends to launch it by the end of the year. Sony seems also quite serious about its intentions, even though the company hasn’t publicly commented about its plans yet.

And there is talk that even a few cable operators are looking to launch online pay TV offerings in an effort to grow their customer base beyond the boundaries of their market territories. In fact, Cox already started testing an internet-based service with a small set of customers in Orange County, Calif.

flarewatch

Cox is already testing its own internet-based pay TV service dubbed Flarewatch in Southern California.

But there’s also another side to the coin, one that hasn’t been talked about as much. Leaks about possible deals can always be used as leverage in other negotiations. One that comes to mind is the current dispute between Time Warner Cable and CBS, which escalated when CBS went off the air for Time Warner customers more than two weeks ago.

Online and VOD rights play a central role in those negotiations. Time Warner Cable wants to have as many rights to CBS content as possible, and CBS wants the cable operator to pay more as it is starting to stream content to iPads and elsewhere.

There have also been reports that Time Warner Cable is looking to add clauses to its contracts that would prevent networks from licensing their content to new streaming services like the ones Intel, Sony and others are working on.

All of this is being closely watched by other networks and operators in an industry where the next retrans fight is always just around the corner. In this climate, leaking news about the imminent launch of new competition could have a variety of purposes, from influencing prices to asking for more exclusivity.

Unfortunately, it doesn’t necessarily mean that a whole host of new services and options is going to become available tomorrow. For that, we have to wait for some actual deals.

Image courtesy of Flickr user HarshPatel;Photographer.

  1. Jeremy Toeman Friday, August 23, 2013

    “just around the corner” in TV industry time = 5-20 years. otherwise spot on. :)

    Share
  2. I agree with Jeremy Toeman. Anyway keep it up gigaoms! well informed articles not half assed like gizmodo’s. Btw I wish the commenting thing on this site would be easier to use.

    Share
  3. lawrence v pross Sunday, August 25, 2013

    heheh…..what will be exposed is the hoax that terrifies all of them…..that the advertizing foundation of the american economy is a scam. It not only is fundamentally faulty, it is utterly unnecessary. Of course we can’t have the truth out there can we…….they need to watch you watching them or the whole thing falls apart…….hilarious…..suibne

    Share

Comments have been disabled for this post