itV Doctor Column: What Bull Durham Taught us about OTT

Dear Readers:

There is a classic quote from Ebby Calvin ("Meat") LaLoosh in "Bull Durham" that is very appropriate for our wacky business these days: "Baseball's a very simple game: you throw the ball, you catch the ball, you hit the ball."

And television is a very simple business: you make the show, you distribute the show, you watch the show.

And in all honesty, a lot of the talk about THE DISRUPTIVE IMPACT OF OTT!!!!!!! is just that: talk.

We still gotta make the shows, distribute the shows, and get people to watch.

At the TVOT conference in San Francisco, June 23rd-24th, the good doctor will be moderating a panel entitled, "It's Not TV, It's OTT." And among our panelists, we have Mike Earle, CEO of aioTV; Claire McHugh, CEO of Axonista and Adam Ware, SVP and Head of Digital Media from The Tennis Channel. We also have Adam Lowy, General Manager of Interactive and Advanced Television for Dish Network; and Daren Gill, VP of Advanced Search and Recommendations for Rovi.

In preparation for the panel, I asked the panelists the following question: "What are the HOT issues (problems and opportunities) in the OTT space that you see coming down the pike." Here are some of their responses.
 


 

Mike Earle, CEO of aioTV (seen above with ABC/Disney execs at NAB), had this to say:

"If we rewind to when there was just Cable TV, we realize the goal was always to connect consumers with content. Before the Internet, we had cable distribution nets that allowed content owners to reach consumers where they never could before. (Broadcasters clearly could get there via OTA, but it was less than reliable.) The fixed line networks effectively became the aggregation platform to connect consumers with content. Then along came the EPG that allowed consumers to find and consume more and more content based upon more and more channels. Fast-forward to today and we introduce the OTT phenomenon where the Internet and consumer devices become the aggregation platform.

Now content creators can reach consumers direct and the aggregation is now provided by the UI on the client device, and the Internet becomes the distribution network. The bold truth of the matter is that existing Cable TV and Satellite providers are no longer the primary or only aggregation and distribution platforms; everything can now be done in software and across the Internet, and the playout devices are the 'TV.' Anything with a screen and access to the Internet now becomes what we traditionally refer to as TV (not just the big piece of glass in the living room ). If the ultimate goal is to deliver content to the consumer it can now be done without the MVPD.

Until now, traditional business models have dictated that the process remain status quo, but clearly that is beginning to shift in favor of a direct-to-consumer model, even if that is authenticated by the traditional multichannel Pay-TV provider. We are already seeing that a Cable or Satellite provider is going to look like a Hulu or Netflix very quickly, and the consumer will be making choices based on what content is available, how it is presented/discovered/packaged, and price. No longer do we see the Cable and Satellite MVPD's being the 'go to' for video content, and as rights evolve we will see the lines continue to blur in the eyes of the consumer as to what TV, and primarily a video entertainment package looks like and who provides it. It's not TV any more, (that term needs to slip away into the ether) it's a video content entertainment package or service."
 


 

Claire McHugh and Daragh Ward, CEO and CTO respectively of Axonista (above at the Blackbox "bbconnect" 2015 startup showcase) sent this along from a cafe in Paris:

"Pet Peeve #1: Terrible user interfaces

Where do viewers go to watch TV? They go to:

Linear

  • The only option when TV was invented, but these days primarily for live sports/news/reality.
  • UI is the TV remote with limited features--channel switch/volume.
  • UX is fine if you're at home and ready to watch when the show is scheduled--otherwise sucks.
  • Best innovator: Harmony universal remotes.

DVR

  • Introduced as a differentiating feature by cable providers.
  • UI designed by cable provider as part of set-top box--clunky and ugly.
  • UX is acceptable for the most part.
  • Best innovator: Tivo.

OTT

  • Connected boxes that allow newcomers to bring fresh ideas to the living room.
  • UI is generally much better than cable set top boxes--it has to be good in order to convince viewers to buy an additional box.
  • UX is better, for the most part, than cable set-top boxes because OTT players are smaller, leaner and are less burdened by the weight of history than cable providers.
  • Best innovator: Roku.

Mobile

  • Coming to TV from a different direction--UGC.
  • Encompasses OTT and OTT is a subset of mobile.
  • UI is designed by the unlimited imagination of a global legion of mobile designers--it's not always good, but there's an ability to try, fail and repeat that isn't possible with physical devices.
  • UX is crafted by app developers who know good UX, because their very existence depends on their ability to make good UX.
  • Best innovator: TBD, but we believe that it will be the player that best taps the new possibility of using touch screen devices to make TV truly interactive.

TV wants to be mobile and OTT is a stepping stone on the way there. As we go down through the list of places users go to find TV, we find that the UI improves each step of the way. Ultimately, as content becomes equally available across all of these consumption points (and, importantly, mobile fixes lingering QoS issues), users will gravitate towards the place where the discovery UI is the most delightful to use. We believe that this is the OTT and mobile end of the range simply because that's where most innovation is possible.

Axonista is firmly in the Mobile camp on this map, but we are bridging the gap between OTT and mobile and helping broadcasters, production companies and other players who want to be part of the mobile revolution to bring wonderful, fresh, innovative experiences to their audiences.

We are award winning interface designers and interactive experience builders for the new world of TV.

Pet Peeve #2: Discovery

Content is king and always will be.

When a user is watching content it's just them and their TV. The only thing important is manufacture and quality of TV and size of screen.

Outside of content, it's the experience of discovery. Whoever makes the experience of getting from A (sitting down on sofa) to B (watching your show) and the experience of getting from A (the show I'm watching now that's just ending) to B (the next show I watch) as enjoyable and quick as possible will win here.

Even though some progress has been made, discovery remains a huge, difficult issue.

No content provider, whether my cable provider or my shiny OTT box, not Netflix nor Amazon, knows what I want to watch next. And those guys have some of the smartest engineers on the planet making the smartest algorithms.

Axonista believes that this is a race between the tech giants (Google, Apple, Amazon, Facebook) and the companies with the most to lose in the battle (cable companies).

In order to get there, the winner has to really figure out my entire personality and the mood I'm in at any given time. I think we're three years out from that."

Finally, Adam Ware, SVP and Head of Digital Media for The Tennis Channel (celebrating Tennis Channel's coverage of The French Open) weighs in. Actually, Adam was the first to respond to my query--appropriate since The Tennis Channel was the first cable network to take the plunge with an OTT service in May, 2014. Here are Adam's comments:

1) "The Enemy of my Enemy is my Friend

Hulu Plus is aggressively doing distribution deals with MVPD's. It's a fascinating development that MVPD's are now resellers of OTT services. And OTT services are aggressively figuring out ways to grow their subscriber base by going to the 'enemy.' It's no longer about cord-cutters or cord-nevers or cord-whatevers. It's about offering the most value, the easiest experience and the most options to the consumer.

So, ¦is this a good thing? A bad thing? Now that traditional distribution strategies are out the window, what comes next?

2) Aren't we all MVPD's?

Now that MVPD's are selling OTT VOD services, should OTT VOD services start selling channels? Should Netflix become a reseller of CBS All Access or WWE Network or Tennis Channel Plus? Should local broadcast stations that now have their own apps and TVE experiences start selling OTT services so that they can start taking advantage of subscription revenues?

3) As the World Churns

Understanding 'Churn': Everyone in the OTT subscription space is in the subscriber acquisition stage of things. There's tons of focus on how to launch, how much to spend, what kind of promotion works (free previews, etc). And there's tons of user data that we can all use to tell whatever story we want to. But, do any of us really have a handle (a true understanding/strategy) on how to minimize churn?

4) Brought to you by No One:

How many pitches have we all heard from new ventures offering some really cool things to make the viewer experience more cool? And how many times have those same companies said that we could pay for their services by securing a sponsor to pay for it? And how many times has the Ad Sales department laughed at us every time we ask them how much more money do they think they can get because we have this really cool new technology?

So, how does the business model adjust so that we can actually take advantage of these new ideas without having to go to a sponsor to pay for it?

 

Finally: TVE on its own has real limitations in terms of generating additional revenues. It's more of a defensive act, as viewers just expect to be able to take their cable subscription with them. It's kind of like when everyone had to go HD. You just had to... Even though there were no additional revenue opportunities.

And it seems that everyone is moving to a skinny bundle of sorts. So...is the age of a la carte finally here? Is there an opportunity to offer a basic service with premium upgrades? Are programmers/networks (and the industry) positioned for this?

Tennis Channel is offering such a model with a TVE channel and a premium subscription channel in the same product.

Who can do this model? Who can't? What's better for the consumer? What's best for the content-creation ecosystem?"

TVOT 2015 San Francisco is going to be a BLOCKBUSTER event, at The Presidio of San Francisco; location for a number of scenes from "Star Trek IV, The Voyage Home" (the one with the whales). Join us.

 

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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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