The iTV Doctor Is In! The Shade Tree Mechanic Goes Over the Top

Dear Readers:

My father was a brilliant chemical and mechanical engineer. When he bought a new 1964 Pontiac GTO, he was so curious about the engine that he took it apart and laid the pieces out on the garage floor. And when he put it back together, he didn't have any parts left over (a skill I never mastered...).

But one thing Dad always talked about was the primary operating philosophy of the Shade Tree Mechanic: "If it ain't broke, don't fix it." And for all of his life, and for most of mine, that philosophy has worked.

Until now.

We have, in the US, a perfectly functioning Television industry.

Well-seasoned, profitable and incomprehensible to anyone outside of the US, it ain't broke. It's constantly evolving, of course. And for over 50 years (40 of which I've worked in it), it's done the job.

With billions of dollars of annual revenue and hundreds of thousands working in the ecosystem, it would seem risky to even tinker with the basics, much less turn it inside out.

But that's exactly what we're doing. And we're doing the right thing.

Those of you who attended the TV of Tomorrow Show in San Francisco saw my panel on OTT & The Virtual MSO. We continued that conversation at Digital Media Wire's Future of Television Conference on September 10th, and we will further the topic at TVOT NYC on December 9th, 2014.

There are news stories popping up every day now:

  • Sony lands a package of 22 Viacom channels for their planned OTT  service; Disney, Fox, Discovery, Time Warner and Starz appear to be lining up.
  • Dish names their own OTT service "nutv," initially powered by ABC, ESPN and Disney Channel.
  • DirecTV announces a late-2014 launch of their "Ya Veo" OTT service, targeted to the Hispanic community.
  • Verizon CEO Lowell McAdam puts a mid-2015 date on Verizon's OTT service.
  • Even premium networks like HBO and Showtime are starting to appear in the conversation, according to Gary Arlen: http://www.multichannel.com/blog/i-was-saying/more-hints-hbo-showtime-ar...

The fact is, everybody is going Over The Top, and everybody knows it. It's not a question of IF, but WHEN. It's a good time to be a content owner, and a great time to be in contract law.

Your friendly neighborhood Doctor has been attempting to dispense with the Who/What/When/Why/Where mystery and go directly to primary question: How do we pull it off?

The industry is literally going to dis-integrate. And at some point, we'll need to re-integrate.

By this time next year, we are going to have something well north of ten million video homes dealing with what I call the "Video Kitchen Table." They are going to cover their kitchen table with a variety of subscription television services, from traditional distributors, television networks, aggregators and content owners. All with different rates, different subscription terms and vastly different user experiences. Our friends in the newly forming OTT space will discover the dark underbelly of subscription television: churn. Consumers will flip from one service to another annually, quarterly, monthly or even daily. Our customers will respond to one promotion or one new series, take the offer, and then flip to another.

And then the consumers and the industry at large will come to appreciate the role of the traditional service providers like Comcast, Verizon and DirecTV. They make it easy. For everybody. They support the dual-revenue stream (advertising plus license fees) that the TV networks have come to depend on. They provide the critical delivery technology. And perhaps most of all, they help the consumers FIND the content!

The mix of content from Netflix, Amazon Prime, YouTube, NBC/CBS/ABC/Fox, Warner/Paramount/Universal and EVERYBODY else is going to be virtually impossible for the consumer to navigate. We'll all be reminded that TV, like movies, is a hits business, and viewers will always find the most popular shows. Their friends may help them find other shows and favorites on social media. "Going Viral" will become the ultimate goal of video promotion, to the point of absurdity.

It will be overwhelming, confusing and absolutely wonderful.

And we'll be watching.

In previous columns we've been looking at the OTT space across the pond, speaking with the good people at MPP Global and BSkyB. Our next column will take a look one of the companies that is creating the user experiences that are driving OTT: Ostmodern.

Stay tuned.

 

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The iTV Doctor is Rick Howe, who provides interactive video consulting services to programmers, advertisers and technology providers. He is the recipient of a CTAM Tami Award for retention marketing and this year was inducted into The Cable Pioneers. He is also the co-author of a patent for the use of multiscreen mosaics in EPG's. Endorsed by top cable and satellite distributors, "Dr" Howe still makes house calls, and the first visit is always free. His services include product development, distribution strategy and the development of low-cost interactive applications for rapid deployment across all platforms.

Have a question for the iTV Doctor? Email him at TheiTVDoctor@gmail.com

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