Monetization Model, Seamlessness Called Keys to Success of TV Everywhere

How much consumers are willing to pay is a sticking point for advancement of TV Everywhere. Sherry Brennan, Fox Networks senior vice president-sales strategy and development, took a defensive position against suggestions that programming costs are high and that customers don’t have a lot of disposable income. She observed how much people pay for cellphone plans “or a cup of coffee or to go to the movies or a baseball game,” calling a $70 cable bill a “fabulous value for the 250 hours a month” people spend watching TV -- without addressing that cable is competing with some of the activities cable for consumers’ dollars. At “30 cents an hour,” Brennan said, “I don’t know what else you can do, other than walking in the park, that’s that cheap.” She compared cable companies to Costco as distributors and said, “You don’t hear Costco complaining about how much Coca-Cola charges them,” saying the industry should be “singing from the same song sheet about what a great value the product that we all prepare, market, produce and sell is."

Cable company representatives spoke of the advertising opportunities afforded by mobile devices in the TV Everywhere picture. Chris Faw, senior vice president-operations for Time Warner Cable, said cable companies have to make TV Everywhere “as functional as linear was in the old cable TV space,” meaning advertising has to be available to programmers and to local markets “who need to sell it.” The latter can be more powerful with TV Everywhere by being “more relevant to the consumer,” he said.

For advertisers, ads are more measurable on the mobile side, although “more complicated on the operations side,” Faw said. But “there’s a lot more runway, a lot more possibility in TV Everywhere,” and Time Warner is enthusiastic about the possibilities, he said. How cable operators will share in the advertising model, and how they'll work with programmers has yet to be determined, he said. But, he noted in response to Brennan’s 30-cents-an-hour rate for cable, “The reason that cable TV is 30 cents and not 40 or 50 cents an hour to consumers is because of the advertising model."

Making the consumer experience seamless between the TV and a mobile device is key to customer acceptance, panelists said. The industry is at the beginning of a new era where TV refers not to the screen in the living room but to any screen that delivers TV programming. Children are growing up thinking they're watching TV when they're watching a TV show on a tablet, Brennan noted. So the viewing experience has to be consistent from device to device, she said.

Consumers expect TV Everywhere to work like the TV experience, said Jeremy Helfand, vice president of Adobe Primetime, the platform behind TV Everywhere. Consumers today have to be concerned whether TV Everywhere content is supported on an Android or iOS device, on a smartphone versus a tablet, or on a video game console, he said. “The experience needs to be consistent for a consumer to really take advantage of it,” he said, saying people “get frustrated when they have a hard time finding the content they want when they know it’s available.” The easier it is for consumers to access content, “the more they're going to consume,” he said.

Currently, though, the cable industry is far apart on approaches to technology, monetization and presentation of content for TV Everywhere, said Mark Garner, senior vice president-business development, A+E Networks. “Why can’t we get our act together?” he asked, citing other ways the industry has come to together through CableLabs and the Cable & Telecommunications Association for Marketing. “For some reason, we can’t talk about why we can’t monetize the most basic assets in a broadband on-demand environment,” Garner said. There’s an “absolute demand” for the content in every rights negotiation, Garner said, but “no consideration given to the things we all say are important: monetization, presentation, the network effect.” The digital environment has been around for years, but only one or two distributors have the ability to offer a mobile solution, he said.

Comcast’s Strauss called performance-based advertising models “the right approach.” Comcast wants to be able to “monetize those eyeballs” anywhere subscribers get content. “One of the game changers of TV Everywhere is to be able to take content truly anywhere you want and not have to worry about a connection and at the same time be able to serve them relevant messages and monetize that,” he said. “This is a big win for everybody if we can make it work."

Regarding when Comcast sees programs available as downloads-to-go, Strauss said, “Sooner rather than later.” Comcast is working with partners and is “ready to go there,” he said. Strauss called on demand the first wave of TV Everywhere, and viewing windows the second wave. The third wave “is going to be live” programming and Comcast is steering in that direction, he said.

A way to track viewership is an important element of the ad model for TV Everywhere. Garner said viewer tracking services are “stepping up” and that by September Nielsen will be able to do “some measurement we've all been asking for.” Now “it’s our turn to step up and do what’s necessary,” he said, including ID3 tagging on content and providing the necessary software development kits. “We have to communicate all that to the buying marketplace,” he said,.

TWC’s Faw said if cable companies don’t take advantage of the available technology to take cable to the next level, “then shame on us.” He referred to the challenge the cable industry gave to audience measuring services Nielsen and Rentrak when it decided to “throw it out there and sample a few boxes and see what comes next.” With technology today, “we now have it in our wheelhouse … because we know who’s connected, when they authenticated, how long they watched and we know something about them,” he said. And they can give consumers interactivity in return, he said.

Authentication presents its own set of challenges, Faw said. There’s a lot of discussion about the process of authentication, he said. For consumers to participate, “We have to make it easier and do a better job of explaining why you should even bother being authenticated,” he said, saying it shouldn’t even be called authentication “because no one knows what that means.” Time Warner extended technology it used for the London Olympics where consumers watching at home who were also high-speed data subscribers -- the “vast majority” of customers -- could be auto-authenticated so they didn’t have to type in a user ID or password, he said. For out-of-home viewing, some level of authentication is required to give subscribers personalized recommendations and automatic playback across devices. “That’s the balancing act we're trying to navigate,” he said.

Devices themselves could be enablers, Brennan of Fox Networks suggested. She referred to a demo at a cable show where a phone with a near field communications (NFC) chip connected to a set-top box to authenticate the phone. A remote control with NFC could authenticate a tablet using that method. Faw of Time Warner said those kinds of applications are “in the future.” Time Warner is starting to “remove some of the friction” from the viewing process, which would include auto-authentication. “If you're in the living room and have your phone, and you have you credentials on your phone, I should be able to know who you are and can personalize the experience,” he said. That’s the “next evolution” Time Warner is exploring, he said.

The panelists said plenty of next-gen opportunities exist, but clearing the paths to successful implementation is the challenge. Garner said tablets didn’t even exist three and a half years ago, and now more than 50 percent of all TV Everywhere content is viewed on them. “Every time you stand up a new device you have to find a way to get there,” he said. “Being able to get to all of those devices is paramount to delivering on the promise of TV Everywhere,” he said.

Tablets didn’t exist when the idea of TV Everywhere was developed, said Strauss, to illustrate how tough it is to predict the future of technology. Although there’s no doubt smartphones and tablets have been catalysts for TV Everywhere, most TV consumption is at home, he said. “People will default to the best screen available,” he said. Comcast has roughly 20,000 assets to offer on demand, but Strauss believes streaming live TV, a service Comcast launched a few weeks ago across 35 networks, could be huge. “That could change the paradigm of live TV and sports and news to where we see consumption out of the home more,” he said. -- Rebecca Day

TV of Tomorrow Conference Notebook

Samsung wants to more tightly link Internet-capable devices, building on its acquisition of TV app developer Movl, Juan Pablo Gnecco, senior director of the company’s new San Jose-based multiscreen innovation group, told us. Samsung bought Movl earlier this year after using its software to move content from mobile devices to TVs, said Gnecco, who launched Movl with that developers’ Chief Technology Officer Alan Queen in 2010 and had 13 employees. Among Movl projects was KontrolTV, which was designed to offer users shortcuts to finding multiple TV apps from the same app, including trends, tweets and other social media references related to TV shows. The software is designed to make it easier to toggle among various TV apps during multiscreen viewing, Gnecco said. In addition to being able move content from a mobile device to a TV, Samsung is working to reverse the path, Gnecco said. Movl came to Samsung’s attention in 2011 when it won $200,000 with its WeDraw app as part the company’s smart TV apps competition. WeDraw lets contestants win points and compete by guessing another player’s drawing. Movl also developed SwipeIt, which allows Android phone and Samsung TV users to “swipe” content from their phones and have it appear on a TV screen. Movl also created a Direct Connect service that uses a mobile device’s Wi-Fi or 3G capabilities. By tapping into a product’s accelerometer, Direct Connect enables a smartphone to be a game controller. “There is a simple way to access content and the devices can talk to each other,” Gnecco said. Samsung is opening its application programming interface to allow developers to more easily create apps. “With the right tools you can connect the two screens,” Gnecco said. Before its sale to Samsung, Movl also received $500,000 from billionaire investor and Dallas Mavericks owner Mark Cuban.