“TV Everywhere,” the set of new initiatives to make subscription programming available online exclusively to current pay-TV subscribers, could effect the most far-reaching change in the television industry since the introduction of cable. Like community-antenna TV (CATV), as cable was originally known, TV Everywhere has the potential not only to change the way people access television content but to radically reorder the relationship between programmers and distributors.
Its success is far from assured, however. TV Everywhere faces a number of technical and economic hurdles that will need to be overcome before its full impact can be felt, as I detail in a study released today by GigaOM Pro (subscription required) in connection with this Thursday’s NewTeeVee Live conference.
The technical challenges concern authentication, as NewTeeVee readers are likely aware, but also authorization. Given the large number of cable systems in the U.S., and the multitude of specific programming packages to which a person can subscribe, some method for mapping a user’s cable or satellite subscription package to particular pieces of content hosted on various web sites will be essential.
From a technical perspective, in fact, it’s likely to prove an even knottier problem than the issue of authentication, where at least some specific proposals are already being batted around, because authorization is likely to require a degree of data-sharing on subscribers that will no doubt make some service providers uneasy.
From a business perspective, though, authorization may be more important than the authentication piece, because it will directly affect the bottom lines of both service providers and programmers. As I explain in the report:
[U]nless individual subscription plans can be mapped to specific video assets hosted on multiple sites, TV Everywhere could be ripe for abuse. Why pay your cable provider for a premium programming tier, for instance, if a basic subscription can grant access to online resources containing both basic and premium content?
Economic Hurdles Ahead
Beyond the technical challenges, however, the most vexing questions facing TV Everywhere are economic. Is there a business model to sustain the incremental costs of making the vast library of pay-TV content available for streaming and maintaining the authentication system?
For now, cable MSOs are planning to offer TV Everywhere as a value-added service to their subscribers at no additional cost. That may be fine as long as subscribers are using the same MSO’s broadband service to access content online. But it may be less than fine when subscribers want to access their cable channels outside the home, like on their laptops while traveling or using a wireless handheld device.
Beyond that is TV Everywhere’s potential to shake up the relationship between cable programmers and distributors. With retransmission fees increasingly vital to programmers, it’s hard to imagine they won’t look to hike those costs as cable and satellite providers seek to distribute the content online, adding further heat to what often have been tense negotiations.
Programmers may be compelled to seek higher fees for the additional exploitation rights to comply with talent deals, collective bargaining agreements with the creative guilds, music clearances and other contractual obligations involved in producing TV programming.
The report offers a comprehensive overview of all TV Everywhere trials being conducted by major MVPDs and analyzes the strategic and business-model issues confronting programmers and service providers as they try to respond to the challenges and opportunities presented by digital distribution platforms. It also addresses questions related to audience measurement on digital platforms and potential regulatory developments that will affect how TV Everywhere ultimately evolves.
Paul Sweeting is an analyst for GigaOM Pro and author of the latest report, “TV Everywhere.” Attendees of NewTeeVee Live will receive a free copy of the report via email; others can access it by subscribing to GigaOM Pro directly.