Thursday, January 2, 2014

"TV Everywhere" Challenged

The concept of "TV Everywhere" - the ubiquitous access to TV programming on any device, at any time, and at any location (including while mobile) is facing a critical challenge from those seeking to control access so as to maximize licensing fees and revenues.  This can be seen in several recent trends:

  1. Lawsuits against Aereo and similar services that seek to make local broadcast station signals accessible from mobile devices (without actually putting a tuner and antenna onboard).  Almost as soon as the product started trials in several cities, networks and big station groups filed suit challenging the legality of the practice.  The broadcasters have lost at every court level so far, and have asked the Supreme Court to weigh in on the temerity of anyone helping people to watch free over-the-air TV broadcasts without paying them.  I'm hoping that the case gets cert, so that a Justice can ask the network lawyers - "So, in essence, you want to prevent people from watching free over-the-air TV signals on anything other than a TV set?" - or - "You're arguing that you deserve to be paid so people can watch your free broadcast signal?"  The whole idea that stations - who are losing audiences to competition - wouldn't want to expand their potential audience base is kind of nonsensical, until you realize that stations and networks are increasingly turning to licensing fees as a major revenue source.
  2. The drive for maximizing licensing fees through retrans fees for local stations.  CBS in particular is pushing the idea that cable MSOs need to pay $3-5/mo. per subscriber in retransmission fees for their local affiliates.  While this may seem a good short-term strategy, it's likely to lead to some MSOs (which remain - with DBS & telco cable operators - the major source for video programming for 90% of US households) dropping the local affiliates.  And if successful, it'll sure lead to sticker shock if the Big Four jacks up subscription costs $15-20 a month for watching "free" TV, and probably a lot of people selecting to not take that bundle.  The broadcasters seem to be realizing that "free" and loading up on licensing fees are incompatible, so they're resorting to classic fear-mongering of taking all the good programs (and sports) to pay cable.  
  3. In the meantime, ABC is looking to regain control of online access to its programs, by seeking to block subscribers of DirecTV, the Dish, and TWC (TimeWarnerCable) from being able to access recently aired programs online.  It's also removing access to that programming from the free version of Hulu+.  Those wanting access will have to subscribe to Hulu Plus, or purchase episodes at $2.99 a piece from iTunes or Amazon.  CBS and Fox are also said to be blocking online access to recent programs and/or looking to move access behind paywalls.  The blocking is said to be limited to systems without "authentication" deals, which assure that only paying customers get access to current programming.
"TV Everywhere" had been set to take off, with big gains in mobile and online viewing, and an increase in authentication protocols.  But a lot of that is predicated on the idea that online and mobile viewing is free, or at least included in existing subscription levels.  Behaviors that seemed designed to make such viewing more costly, such as the efforts outlined above, are not likely to be well-received by consumers.  After all, they have an exploding universe of free content alternatives that they can choose from instead.  With a few exceptions, moving network series and programming from "free" to "pay" is likely to be disastrous - particularly for an industry that still is funded predominantly by advertisers and audience size.

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