Content providers spent much of 2010 in a quandary. Many saw services like Hulu and Netflix as natural outlets to reach an audience. Others saw over-the-top delivery as an anathema. And, of course, most played the middle, offering some content, older content generally, in a final effort to wring every penny from it.
Pay-TV providers turned increasingly to TV Everywhere initiatives, looking to get a foot into the OTT world and some leverage with disenchanted subscribers, but those subscribers in many cases saw TV Everywhere as a ham-handed attempt to limit their options. No service launched with broad content appeal as pay-TV providers, too, had to deal with content providers who refused to give away the rights to their valuable property.
CBS Chief Les Moonves pulled no punches when talking about online video. He believes, in a nutshell, that when his programming investment pays off online as well as it does over the air and via pay-TV delivery it'll be worth his time.
Until then?
"It's good to have our toe in the water," Moonves said. "I'm glad we didn't dive in head first." Offering up his content to online providers like Hulu, content that costs a lot to make, just doesn't make sense, Moonves said. "The problem is, I'm only getting pennies online. If too many people shift to online, I'm not going to be able to produce CSI," which, he said, costs $3 million to produce each episode. As for Netflix? "Some CEOs think Netflix is the anti-Christ," said Moonves. "Others embrace it as the Second Coming. We're somewhere in the middle. Caution is not a bad thing here."
Nevertheless, Hulu continued to grow, seeing its revenues more than double--to some $260 million--from a year ago. The joint venture of Disney, News Corp. and NBC Universal in November rolled out a subscription service, Hulu Plus, for $9.99 a month, then cut the price to $7.99 as competitor Netflix launched its own streaming service--for $7.99 as well.
The battle for content went on all year. Netflix made deals with NBC and Disney for TV episodes that Hulu carried as well. Apple's iTunes continued to make hay with TV episodes it rented for 99 cents--although NBC and Viacom both agreed it was too little cash for valuable content. And programmers themselves rolled out more and more content on their own sites, convinced online video was reducing the value of their content but afraid to not at least go along--at least for awhile--for the ride.
Hulu, meanwhile, which at one point this year talked about a $200 million to $300 million IPO, came to the end of the year with record revenues, but no long-term rights to the content it provides. The result? It's IPO is on hold as it tries to raise money to secure rights to more content.
Even pay-TV stalwart HBO was poised to offer a la carte content online as its paydays with cable providers tightened and it lost 1.5 million subscribers for the year.
Depending upon which side of the bench you sat on, content owners either looked to lock up their content in 2010, or looked to find ways to get it in front of more eyes. In the end, their decisions will have more to do with the success or failure of online video than the technologies, the companies and the consumer.