A "complex Web of vested interests" is flummoxing the pay-TV world's entry into a consistent online-video strategy, according to a story in Variety, which suggested that MVPDs offer "a dizzying hodgepodge of windowing strategies across digital platforms."
The primary problem is that the programming rights between service providers and content owners are byzantine, to say the least. Programmers "don't want to cannibalize the aud(ience) for premiere telecasts, reruns and even DVR playback within the first three days when advertising revenue is earned," the story said.
At the same time, these same programmers--to whom the operators pay homage, among other things--"want to maximize the exposure of their shows in ways that can drive ratings back to on-air, dilute the appeal of piracy and capitalize on the momentum of online video in general."
MVPDs are anxious to get on-air programming online as soon as possible but "need to protect their relationships with operators that pay them a fortune in carriage fees."
The ideal world for programmers is to air the programs on a pay TV service then allow those same subscribers to use those paid platforms to watch programs on VoD or even online as part of a TV Everywhere package. OTT online content purveyors, though, are expected to wait in line if they can't produce more revenue.
"If we take that to Hulu, where there is not a dedicated charge and people can just come in and share that show, we feel that's potentially more disruptive to the ecosystem," AMC Networks (Nasdaq: AMCX) COO Ed Carroll told Variety.
There is, however, pressure on both sides and it can come to the fore in nasty ways, such as when the online content became a skirmish in the programming rights battle between DirecTV (Nasdaq: DTV) and Viacom (NYSE: VIA). DirecTV (NYSE: DTV), shut off from Viacom programming, suggested subscribers look online for their MTV and Comedy Channel; Viacom—briefly--shut down its online material.
Eventually, the two sides kissed and made up, but there were bruises left online and off from the conflict, perhaps more so for DirecTV than Viacom since the satellite provider wanted to know why it had to pay for content that's showing up free online.
"It was raised as an issue by their team but nothing about our deal that we ended up with changed our rights," Denise Denson, executive vice president of distribution and marketing at MTV Networks (a Viacom channel), told Variety.
In the end, both the programmers and the MVPDs agree there must be more consistency in how content ends up online and in what venues.
"If the industry could move faster to establish some kind of uniformity across the board, I think it would absolutely change how programmers would window content in the free, on-demand space," Denson summed up for the story.
- read the Variety story
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