Commenting on the proposed $85.4 billion takeover of his company by AT&T, Time Warner Inc. CEO Jeff Bewkes discussed the ability of the combined company to create innovative over-the-top products like the upcoming DirecTV Now.
But in the process, Bewkes – who originally spearheaded the pay-TV industry’s TV Everywhere initiative back in 2009 – offered a tacit admission that the complexity of programming deals had fatally undermined traditional pay-TV’s plan to distribute content to mobile devices.
Indeed, the father of TV Everywhere has moved on to full-fledged OTT.
In order to create innovative digital TV products that compete with next-generation video services offered by technology companies like Netflix and Facebook, pay-TV operators and media companies can’t have an “arms-length” relationship, concluded Bewkes, who spoke alongside AT&T CEO Randall Stephenson Monday during AT&T’s third-quarter earnings call. They need to be under the same roof to get stuff done.
“We’ve been trying for years at Time Warner to get more video-on-demand,” lamented Bewkes, noting that “it has taken a long time” for the necessary negotiations between programmers and operators to play out.
Both AT&T and Time Warner believe that by combining forces on the nationally distributed, virtual MVPD service DirecTV Now, they can set a template of innovation that will be followed by other media conglomerates.
“We are both convinced that as we innovate this way and accelerate the pace of innovation, it’s going to convince others,” Stephenson said.
For his part, Bewkes seemed to concede that the pay-TV industry’s quest to augment its traditional, linear packages with authenticated multiscreen services didn’t work out as planned. Simply stated, the vast complexity of program rights deals rendered a consumer experience that – when examined holistically – isn’t on par with services like Netflix.
The quality of TVE apps has been inconsistent. The authentication process was often very convoluted. And consumers have never understood what shows they can watch on smartphones and tablets and which ones they can’t. They’ve also been flummoxed by in-home and out-of-home rights issues, not to mention device compatibility for apps.
“We’ve all had talks for the last six years about why it didn’t go faster with the distribution industry,” said Bewkes during a weekend conference call to announce the merger.