TV v.2014: ‘When the Walls Come Crumblin’ Down…’

/ Sep 12, 2014

online video terms to die

John Mellencamp’s campy song is back with a vengeance in the world of television.

Just in the past two days — and in rapid succession — there were two fairly remarkable announcements that should be rocking the media business even more than they likely are. Make no mistake, these are big deals, in every sense of the word.
First, Viacom licenses 22 of its live and VOD premium network to Sony for its new OTT service for the PlayStation, Sony smart TVs, and other Sony connected devices. And, second, Verizon announces an early 2015 launch for its long-anticipated “virtual” MSO, which is so virtual, that it is wireless. This ain’t no FiOS TV; this is TV re-imagined for your 24/7 companion. In other words, your small screen…
WallsYes, Verizon announced that its down-sized, “bite-sized” cable-lite programming package will include the big four broadcasters and NFL games (via its existing exclusive smartphone deal). But, even more symbolically and, therefore, significantly, Verizon — in the same breath as referencing the traditional content of those august institutions — also announced the featuring (yes, featuring!) of new-fangled “bite-sized” AwesomenessTV programming. And, with that acknowledgement, Verizon elevated (rightfully!) YouTube economy premium short-form content to the ranks of “mattering” to at least some in the most senior ranks of media. It’s a process that started earlier this year with Disney’s landmark $500-$950 million acquisition of Maker Studios — a deal which, I believe, will be seen as a shrewd move a few years from now (remember Google buying YouTube, anyone?).
When making his announcement yesterday at Goldman Sachs’ annual mega-media conference (funded, no doubt, by the bank’s own special form of technical prowess during the past decade), Verizon chairman and CEO Lowell McAdam proudly exclaimed the almost unthinkable — that (as reported by Todd Spangler of Variety) “there’s been an attitude shift among cable programmers toward accepting a new over-the-top model for delivering pay TV.”  In McAdam’s own words — perhaps a bit unfortunately chosen in terms of its NFL-like imagery at this particular moment in time — “It’s moved from almost a stiff-arm to much more of an embrace.”And, Verizon’s McAdam was not alone. Time Warner CEO Jeff Bewkes emphasized the company’s growing interest in offering HBO Go as a stand-alone OTT service — absolute heresy…until now.
In other words, the times, they are a-changin’…and consumers soon will be able to choose never-before-available smaller, more affordable premium programming packages.
Doubt we are seeing much “embracing” about this transformation in the ranks of traditional media. But, we are seeing acceptance. And acceptance is the first step in the road to recovery. Eyeballs — especially the coveted young eyeballs — are increasingly off traditional MSO services and on YouTube and leading MCNs (and increasingly viewing that content on mobile). That means those younger eyeballs are increasingly less likely to pay in a “traditional” way (a reality underscored by a new study concluding that cord cutting will rise in the next 12 months and the words of Disney’s CFO Jay Rasulo). That disruptive reality calls for non-traditional thinking — and that is precisely what we are seeing here.
The long anticipated — and inevitable — dismantling of the traditional cable “bundle” is happening right before our eyes. And once the dam opens, it can never be closed.
2014 will be seen as a pivotal year in the world of media — and not just because all of us are here at this moment and in this time.
Just look around you. Watch how others around you are watching. Especially the kids…
Check out more of Peter Csathy’s thoughts on the digital media space at the Digital Media Update.
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