Will Cable Operators Switch to A La Carte or Will Programmers Resist?

  • The weak economy is leading cable operators to reverse their opposition to so-called “a la carte” programming. Comcast and Time Warner have lost 1.2 million customers in the last 12 months.
  • Programming costs have risen 6-10 percent annually over the last decade. And the fear is that it will continue as they see ESPN, for example, sign a $15 billion, 8-year deal with the NFL. Cable and satellite operators are also now paying to retransmit local broadcast channels.
  • “There is a growing recognition that the current model is broken,” says Craig Moffett, cable analyst at Bernstein Research. He expects smaller, less costly programming packages to emerge as Time Warner is doing with its TV Essentials pack.
  • “The specter of unbundled programming is likely to encounter fierce resistance from network owners such as Viacom Inc or Discovery Communications Inc, which are keen to maintain the economics of selling their most popular channels as a package with their smaller, nascent networks,” reports Reuters.

ESPN: Monday Night Football Extension includes 3D Broadcast Rights

  • ESPN has announced an eight-year extension of “Monday Night Football” that includes 3D broadcast rights, expanded NFL studio programming, highlight rights for TV and ESPN.com, continued Spanish language rights, the Pro Bowl, the NFL Draft,  and rights to simulcast network coverage on tablet devices through the WatchESPN app.
  • The deal, which runs from 2014 to 2021, “should help quell ideas that ESPN 3D might be axed after its removal from U-verse,” suggests Engadget.
  • According to the press release: “The extensive package of NFL rights will fuel the continued growth of ESPN year-round, boosting its core television business while at the same time supporting the company’s ‘best available screen’ strategy with NFL programs on TV, online and on mobile devices via authentication and digital rights.”
  • The agreement will also lead to “Monday Night Football” celebrating its 50th anniversary season on ESPN in 2020.

ESPN’s Billion-Plus Online Video Streams Now Powered by Ooyala

  • ESPN has selected Mountain View-based Ooyala to power the sports broadcaster’s streaming video content. The platform will replace a proprietary model administered by ESPN.
  • Ooyala’s platform will reportedly increase the quality of playback, reduce load times and streamline back-end management.
  • “It’s a serious feather in the cap and vote of confidence for the four-year-old video startup, as ESPN is one of the biggest producers of online video content, with 400 unique visitors hitting play on ESPN videos every second (and serving over 1 billion streams per month),” reports TechCrunch.
  • The media technology site sees the move as positive: “All in all, it’s great to see ESPN finally offering a quality player with fast load times and a more linear on demand experience in which video queues and layouts feel more akin to a television viewing experience — and can compete in ease of video use with YouTube.”

ESPN Takes a New Approach to 3D Production

  • Variety reports that ESPN remains enthusiastic about 3D technology, despite its slow adoption (and AT&T’s recent decision to drop ESPN 3D from its U-Verse TV service).
  • ESPN is pushing its 3D effort by focusing on combining 2D and 3D production (nicknamed “5D”), which the network says brings costs down substantially. 2D/3D production includes slower cutting and more use of robotic cameras. As the production crews gain more experience in shooting sports beyond HD, the equipment, camera placement and general approach continues to improve.
  • “Some innovations created for 3D have even made it over to the 2D side,” reports Variety. “For example, 3D cameras need to be closer to the action than 2D cameras, so the high 50-yard-line shots that are a staple of football coverage are problematic. To get closer, ESPN put a 3D camera on a 22-foot mast on a small vehicle that goes up and down the sideline.”
  • ESPN stands by the technology, explaining that Twitter feedback has been overwhelmingly positive. And some play-by-play announcers have even indicated they don’t want to go back to watching 2D.

Disney in Discussions to Provide TV Everywhere-Type Authentication

  • Similar to the approach Fox announced last month, Disney is negotiating TV Anywhere deals for ABC-TV shows with distributors. Access would require authentication with a cable ID.
  • Fox provides next day access to viewers who log in with cable IDs, and makes others wait for eight days to view content on Fox.com or Hulu.
  • Disney already has deals with Time Warner Cable and Verizon FiOS to access ESPN content using a mobile app.
  • “Our overall approach…has been to make deals that increase revenue while at the same time protect and respect the channel distribution value that we see today,” Disney CEO Bob Iger said. The company is looking to build authentication into future deals, which Iger explains would “allow access to our programming faster or in a more aggressive window if the customer is a multichannel subscriber.”

Review: Gizmodo Excited about ESPN 2.0 for XBox 360

  • Gizmodo calls the new ESPN 2.0 service, available on Microsoft’s Xbox 360 beginning August 25th, “super polished and super useful.”
  • The new interface includes the ability to watch two content streams in 720p simultaneously, a series of scrolling live thumbnails to select other games and access scores and stats, and the ability to control the system using voice commands over the Kinect.
  • Viewers can pause one game to focus on another, for example, or watch replays on one side of the screen while the other game keeps playing, or even access the same game twice (using one screen for replays and keeping the other screen for live coverage). Additionally, a live scoreboard runs vertically down the right side of the screen.

Increased 3D Content may Push Consumer Adoption

In the wake of disappointing 3D TV sales for 2010 (due in large part to a lack of 3D content), this year may see new traction as television vendors switch their strategy to marketing 3D as one feature of new high-def sets, rather than the single selling point. More 3D content is on the horizon via cable and satellite TV channels, Blu-ray Discs and video games. Eventual adoption may also be impacted as consumers shoot their own video with 3D-enabled camcorders.

Disney’s ESPN 3D sports channel began broadcasting in mid-February — while Sony, Discovery and Imax launched their 3net channel the same month. Comcast and DirecTV already have 3D channels, and more than 100 3D channels worldwide are expected by 2015.

“Clearly, lack of content has been holding the market back,” explained Chris Chinnock, president of research firm Insight Media. “But one or two years into the HDTV transition there wasn’t much programming either … It took about seven years to reach 11 percent (household) penetration with HDTV.”

DisplaySearch predicts 6.6 million 3D TVs will ship in North America in 2011 (16 percent of the more than 40 million sets expected to be sold). The research and consulting firm is targeting 15.2 million 3D TVs to ship in 2012 (up 130 percent).

Are Consumers Ready to Cut the Cord?

As alternatives to traditional cable TV services continue to be introduced, the discourse grows regarding whether or not consumers are ready to “cut the cord.” Recent data from ESPN and research firm SNL Kagan suggests that any cable subscriber losses are being offset by gains elsewhere. However, as a percentage, fewer households are subscribing to cable than in the previous year. And financial services firm Stifel Nicolaus recently reported that pay TV might not be making a comeback over the longer term. The research report indicates year-over-year subscriber growth was at a mere 0.3 percent during 2010 — “the lowest year-over-year growth on record.”

According to Stifel Nicolaus analyst Christopher King: “Cable operators have been quick to point to housing and the anniversary of the nationwide digital transition in 2009 as reasons for recent subscriber declines; however, our analysis suggests that growth in the pay TV market has underperformed household formation in recent quarters and the impact of the 2009 digital transition should no longer be an issue.”

The pay TV market is over-saturated (at more than 84 percent of households), and while many continue to blame the state of the economy and the saturation on the declining numbers, it is interesting to note that Netflix added 6.4 million subscribers during 2010. As the cost of pay TV subscriptions continue to rise, consumers are beginning to “further re-evaluate the value they place on traditional pay TV services which bodes well for the likes of Netflix, Amazon and Apple TV among others,” King wrote in the report.

Editor’s Note: For those interested, the GigaOM post “Cord Cutting Threat Ain’t Over Yet” features some very interesting charts including Pay TV Subscriber Growth 3Q09-4Q10, Pay TV Penetration 4Q06-4Q10, and Netflix Subscriber Growth 2010 (as compared to Pay TV).

Can Twitter Save Live TV?

Earlier this year, Mass Relevance commented on the possibility of “Social TV” developing from the interaction of Twitter and television. The post indicates that successful integration could, in fact, rescue live TV.

Addressing the NewTeeVee Live conference on this topic, Twitter Media team’s Robin Sloan discussed how Twitter has recently been used to enhance the live viewing experience, including: running commentary from reps of a given show, viewers tweeting about a program, and live integrated content where viewers tweet about the show and selected content is actually incorporated into the program.  The posts suggests that this last approach is, “tremendously undervalued, and represents no less than a complete revolution for the television industry.”

Mass Relevance reports that tweeting to a show could create some dynamic possibilities for increasing viewer engagement. Examples include swapping out viewer mail segments on talk shows with live tweets, soliciting questions via live tweets on political commentary programs, and incorporating Twitter into the rapid-fire approach of sports analysis shows such as Pardon the Interruption on ESPN.

The report summarizes the win/win potential: “With the audience actively participating — to drive the direction of the show, to interact directly with TV celebrities from the comfort of their living rooms, and ultimately to see their name in lights — media companies will be rewarded with a truly engaged audience, something that is not possible in a DVR-recorded, time-shifted world. Since audience members only get this shot at notoriety by interacting with the show, they are effectively forced to watch it live. This social TV experience is good for the media companies (increased ad sales), good for the advertisers (increased exposure), and — if they’re smart enough or witty enough or artful enough in their Tweets — good for the watching participant (a shot at glory).”

Apple TV Offers Live MLB and NBA Games

Baseball and basketball fans can now turn to the second-generation Apple TV for live and on-demand archived games streaming in HD.  The subscription service will cost $100/year for MLB.tv (spring training and regular season games and access to archived games).  A $120 premium version provides access to both home and away games.  Basketball games are accessible via the NBA League Pass Broadband service. The NBA service offers two options: a $65 version lets users follow up to seven teams throughout the regular season, while a $99 option provides games from all 30 teams.

Both services have blackouts based on the subscription’s registration address.

Access to the new services is enabled by the iOS for Apple TV 4.2 update, and will work similarly to Netflix. Users sign in via an account and password, and then access whatever content the subscription permits. Roku has offered similar MLB.tv access for some time and recently added NHL and UFC options. This could be what sports fans need to ditch traditional cable services.

In a related Wall Street Journal “All Things Digital” article (3/14/11), ESPN reports that only a tiny fraction of sports fans have cut the cable cord, a number that may be moot considering the equal number of fans who added cable and broadband access during the same period.