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    Licensing Music Streaming’s All-Of-The-Above Business Model

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    An all-of-the-above business model is a very awkward fit with traditional music licensing practices.

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    Who Wants To Be An MVPD?

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    The FCC extend program access rights to OTT services, but does anyone want them?

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    NAB 2015 Recap: Top Live, Linear & OTT Trends

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    LAS VEGAS–Last week’s National Association of Broadcasters convention here saw multiscreen, over-the-top broadcasting move, physically and figuratively, from a back corner of the Las Vegas Convention Center to front-and-center of the discussion. “Broadcasting obviously does not exist in isolation, but as a vital piece of the dynamic and ever-changing media and entertainment landscape,” NAB president Gordon Smith said in his keynote address. “As we get closer to realization of the next generation of television broadcasting, we are beginning to envision the new business opportunities it could enable. I believe next gen may be the key to building TV’s […]

FCC Hitting Pause On Pay-TV Overhaul?

For much of the past year, the Federal Communications Commission has been conducting a pair of proceedings that together, depending on their outcomes, could go a long way toward remaking the pay-TV business as we’ve known it. But at an oversight hearing before the House Energy and Commerce Committee yesterday, FCC chairman Tom Wheeler seemed to turn down the heat under both of them.

Receiving the most attention at the hearing was the recently completed report by the Downloadable Security Technical Advisory Committee Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearing(DSTAC), in particular a controversial proposal in it to require pay-TV operators to disaggregate their services into discreet components that would allow third-party set-top box makers to design their own user interfaces that could leverage elements of pay-TV services to create new user experiences (see our previous discussions of the debate here, here and here).

Republican members of the committee were sharply critical of the proposal and accused the FCC of exceeding Congress’s mandate for DSTAC in allowing the committee to consider non-security elements of pay-TV interoperability. Some members all but endorsed a competing proposal, put forth by pay-TV service providers, to adopt an app-based approach to interoperability under which service providers would, in effect, virtualize their existing STBs, complete with proprietary UIs, into apps that could be downloaded and run on third-party devices. Read More »

Cutting The Cord From Both Ends

Depending on whom you believe and when you start counting, cord-cutting is either slowing down or it’s accelerating.

According to a new survey by TDG, the percentage of adult broadband users who are “moderately” or “highly likely ” to cancel their pay TV service in the next six months has dropped by 20 points since last year.

“Cord cutting proclivities have held steady for several years, with approximately 7% of [adult broadband users]  pay-TV subscribers moderately or highly likely to cancel their service in the six months following the survey,” TDG director of research Michael Greeson said in a statement. “In early cable_TV_not12015, however, the number declined to 5.7%. This is the first time in five years we’ve seen significant change in these metrics.”

According to MoffettNathanson analyst Craig Moffett, however, U.S. pay-TV providers lost 357,000 subscribers in the third quarter of 2015,. That was more than twice their losses in the same quarter last year, although it was down substantially from the 605,000 they lost in the second quarter of this year.

Take your pick. Read More »

The Wrong Debate Over Set-Top Boxes

Today (Nov. 9th) was the last day for filing comments with the Federal Communications Commission regarding the final report of the Downloadable Security Technical Advisory Committee (DSTAC) and folks in the pay-TV industry were clearly getting nervous that the FCC might finally, really do something this time to “tear up the set-top box.”

Last week, eight of the largest pay-TV providers, along with the National Cable & Telecommunications Association, the Motion Picture Association Push_button_cable_boxof America, and several equipment manufacturers together sent a phalanx of lawyers and lobbyists to FCC headquarters, ex parte, in a desperate bid to head off any movement by the agency toward a rulemaking that would require pay-TV providers to disaggregate their services into rearrangable  parts as proposed by the technology company and public interest faction of DSTAC.

The group was particularly exercised by an ex parte filing with the commission in late October by Public Knowledge, Google, Amazon and Hauppauge purporting to fill in the technical details of the “virtual head-end” proposal made by the technology faction of DSTAC for separating out the components of pay-TV services. According to MPAA, NCTA et. al., however, the new version “is so changed that it is barely recognizable from [the technology group’s] earlier proposal in the DSTAC Report,” and required more time for study before they could adequately respond to it. Read More »

A World Of Difference: Copyright in TPP and the EU

The full and final text of the Trans Pacific Partnership agreement was officially released today, giving the public and Congress their first look at the long-gestating and controversial trade deal. And it’s clear from the chapters on intellectual property and investment that content creators and copyright owners got more or less everything they were seeking from the deal.

The treaty, which Congress will now have 90 days to vote up or down but cannot change, would require countries to ban the circumvention of EU headquarterstechnical protection measures (i.e. DRM) and, like the the Digital Millennium Copyright Act in the U.S., to sever liability for circumvention from any actual infringement of copyright. In other words, circumvention is verboten whether or not it results in an infringement under a participating country’s national copyright law.

The text does allow countries to pass exceptions to the ban on circumvention for non-infringing uses, as the DMCA permits through a triennial rulemaking by the Library of Congress, but it does not make those exceptions mandatory. The text also avoids any reference to a U.S.-style fair use principal while extending the term of copyright in all TPP countries to the U.S. standard of the life of the author plus 70 years. Read More »

CBS All Access: Live Long And Differentiate

The original five-year mission of the Starship Enterprise was to explore strange new worlds and to seek out new lives and new civilizations. When it next leaves space dock, in 2017, it’s mission will be to explore a new strategy for transporting network TV content over-the-top.

CBS this week thrilled Trekkers throughout the galaxy by announcing the debut of a new, as yet untitled Star Trek series in January 2017, the first new series since the cancellation of “Star Trek: Enterprise” in 2005. But in a plot twist worthy of a Romulan cloaking device, the series will only be viewable in the U.S. on CBS All Access, the network’s $5.99 a month over-the-top streaming service.

Mr-SpockThe move caused many a media head to be scratched. CBS hasn’t disclosed how many subscribers CBS All Access has, but it’s almost certainly fewer than a million, a tiny fraction of the audience reach of CBS itself. Even if CBS wanted to make the new series streaming-only, Netflix has 40 million U.S. subscribers, Amazon Prime Video isn’t far behind, and Hulu has more than 9 million.

CBS All Access is sure to grow between now and 2017, of course. The app is on the new Apple TV and other OTT platforms, and the network continues to negotiate with the NFL for streaming rights to at least some of the games CBS currently broadcasts, all of which should help drive subscriptions. But even with those opportunities it isn’t going to reach Netflix-like numbers by 2017, and maybe not even Hulu numbers. So why such a small platform for such a big franchise like Star Trek? Read More »

Rethinking Music: What The Industry Could Learn From Netflix

It seems fair to say that no one in the music business right now is happy with how it’s being run. As streaming, including both paid and ad-supported, has replaced CD sales as the industry’s main economic engine, the record companies have seen gross revenue decline sharply, artists and songwriters have seen their royalty income diminished, and the companies doing the streaming are losing so much money they’re losing the ability to raise more of it.

In an interesting thought experiment at the Future of Music Policy Summit in Washington this week, musician and CEO of touring van rental service Bandago Sharky Laguana, considered how one component of the industry’s current business model — how subscription revenue Music_Festivalfrom paid streaming services is ultimately allocated to individual artists — might be made more fair, if not necessarily more lucrative.

In very broad strokes, of the $10 a month most subscription services charge consumers, the streaming service keeps $3 (30 percent) and $7 (70 percent) is paid out in royalties (theoretically to artists and songwriters but in practical terms to labels and publishers who are supposed to then distribute them). The portion of that $7 accruing to any one label is calculated based on how many times songs recorded by any of the artists under contract to the label are streamed by subscribers, typically resulting in a per-stream value of a fraction of a penny. Read More »

The Bills, Jaguars And Peak-NFL

Given how little good news Yahoo has had to share with investors lately it’s no surprise that the company is trumpeting the results of Sunday’s first-ever globally live-streamed regular season NFL game, between the Buffalo Bills and Jacksonville Jaguars, which attracted 15.2 million unique viewers and 33.6 million total views. Those numbers make it one of the biggest live-streamed events to date, and compare favorably with the TV audience for  a typically Thursday night or Monday night regular season game, according to the NFL.

“We’re thrilled with the results of our initial step distributing an NFL game to a worldwide audience and with the work of our partner, Yahoo,” NFL senior VP of media strategy, business development and sales,Hans Schroder said in a statement. “We are incredibly excited by the fact that jaguars-billswe took a game that would have been viewed by a relatively limited television audience in the United States and by distributing it digitally were able to attract a global audience of over 15 million viewers.”

Yet as others have pointed out, the reported numbers don’t tell the whole story. Yahoo had to resort to some trick plays to score some of those points, like putting a muted auto-play video of the game on the home pages of several of its properties, which means your Aunt Minnie, who has never watched an NFL game in her life but uses Yahoo as her personal home page, is somewhere in that 15 million. The comparison with broadcast TV viewership is also overstated. As Brian Stetler of CNN pointed out, the 460 million total minutes of football Yahoo claims to have streamed, over the course of a 195-minute game, implies an average of just 2.36 million concurrent viewers, the streaming metric most comparable to TV ratings. Read More »

Red Zone: Why Apple Music Should Fear YouTube Red

The most notable feature of YouTube Red is what’s missing. There is no more Music Key, the long-awaited YouTube subscription music service that has been in beta for much of the past year but never gained much traction. Nor will there be any more dedicated subscription channels, where users could get ad-free access to a single creator’s channel.

Instead, for 10 bucks a month, you’ll get ad-free access to virtually everything on the YouTube platform, including YouTube Gaming and Apple_Music_iPhoneYouTube Kids. There’s also a YouTube Music app for those who simply want to use the service for listening to music.

YouTube Red subscribers will also automatically be subscribed to Google Play Music, Google’s subscription streaming and cloud storage service that up to now had cost $10 a month on a standalone basis.

In effect, Google is now making all of its music and video content services available on both a free, ad-supported basis, and an ad-free subscription basis. (Those who are complaining that YouTube is being mean by hiding the videos of creators who have not yet signed up for the subscription program are missing the point. The point is to have two identical services with two distinct monetization strategies, and letting the consumer decide which to use.) Read More »

The Co-Dependent Marriage Of TV and Sports

According to a report released this week by PriceWaterhouseCooper, the revenue earned from media rights by the North American sports industry will surpass the revenue earned at the gate by 2018, when they’ll reach $19.95 billion and $19.72 billion, respectively, fulfilling the old adage that the sports business is really the TV business.

Increasingly, the reverse is also true: The TV business is really the sports business.

More than a third of all TV advertising in the U.S. today goes to live sports, and that doesn’t include ESPN, which shows a mix of live sports and sports-related programming. Add in ESPN and the share of advertising going to sport programming would top 40 percent, Advancit Capital partner and former Fox Digital president Jonathan Miller estimated from the stage at the New York Media Festival earlier this month. Franklin_Gutierrez_hitting_HRAt the same time, according to SNL Kagan, sports networks account for nearly 20 percent of the carriage fees paid by cable and satellite operators, and that doesn’t count the portion of the carriage and retransmission fees paid to broadcasters and general-interest cable networks that can be attributed to the sports programming they carry. According to an analysis last year by MoffettNathanson analyst Michael Nathanson, the aggregate of sports rights account for as much as 50 percent of the cost of the average cable bill. Read More »

Music Streaming And The Two Drink Minimum

Ask the owner of any bar that hosts occasional live music how they make money and they’ll tell you it ain’t from the music. The music is there to draw a crowd to sell more liquor to, which is where the profits are. The cover charge helps defray the cost of the band so it doesn’t all come out of the liquor receipts. These days, the music streaming business is starting to look a lot like those gin joints.

While Spotify, Pandora and Apple are drawing pretty good crowds, none of them are making money from the music. And they’re starting to live_music_signcast about for other ways to make money. Pandora recently plunked down $450 million to buy live-event ticketing service Ticketfly, presumably hoping for some synergy between those who listen to music on Pandora and those who buy tickets to live shows and concerts. Spotify is trying to leverage its music audience to build a business around non-music content, such as online video.

Apple insists it can eventually make money from music streaming, but with Apple it’s always at least as much about finding new users for its devices, where it makes nearly all of its profits, than about any particular service.

All have invested heavily in data and analytics, initially for internal use but almost certainly with an eye toward turning their data into a product in its own right. Read More »

The Studios Look For An Island In The Set-Top Storm

The Motion Picture Association of America really, really doesn’t want the FCC to tear up the set-top box. So much so that its filing with the commission last week regarding the final report of the Downloadable Security Technical Advisory Committee (DSTAC) contained a thinly veiled threat of litigation should the FCC mandate disaggregation of pay-TV services into parts that can be reassembled at will, and on constitutional grounds no less.

“Mandating such a regime…could violate content owners’: 1) contracts with distributors regarding how their content may be presented, monetized, and accessed; 2)

Wallpaper: Sunrise of the Sea

exclusive rights under section 106 of the Copyright Act to determine how their content is copied, distributed, and publicly performed; 3) First Amendment right against compelled speech; and 4) Fifth Amendment right against taking of property without due compensation,” the MPAA warned. “If third-parties wish to offer a subset of content, services, features, and functions rather than all the choices distributors offer customers in the way that they offer them, the appropriate course is through individualized negotiation, not regulatory fiat.”

What has the Hollywood trade group so exercised is a proposal by one faction within DSTAC, included in the final report, to require cable and satellite providers to unbundle their video feeds from other elements of their services, including the user interface, interactive features and billing, so those feeds can be incorporated into the UI of a third-party device and integrated with other video services. Only then, proponents of unbundling argue, can consumer electronics makers create devices that can compete fully with or replace set-top boxes provided by pay-TV operators. Read More »

For Amazon, Live OTT Comes With A Twitch

At his Streaming Media blog, Frost & Sullivan analyst Dan Rayburn adds a new wrinkle to the ongoing debate over why Amazon kicked Apple TV and Chromecast products out of its online store. According to Rayburn’s sources, Amazon has been chatting up content owners about offering a live, over-the-top video service of some kind.

Rayburn speculates that such a plan could help explain why Amazon recently acquired the cloud-based live streaming platform provider Elemental Technologies at an unusually high valuation:

cable_TV_not1Insiders say Elemental is on a run rate to do close to $100M in 2016. So if the rumors of Amazon valuing Elemental at $500M are correct, Elemental is getting about 5x projected 2016 revenue, a rather high valuation, unless Amazon is also placing value on them for other reasons, like the ability to power their own live OTT service.

I’ll add another data point in support of the notion: Twitch, which Amazon acquired last year for close to $1 billion. As noted in a post here last week, Twitch is rolling out a new set of tools to help its broadcasters linear-ize their channels, by mixing live and on-demand content and creating playlists that turn the channel into a 24/7 experience. Read More »

Search Me, Search Me Not: Apple TV And The Battle For Screen Time

At $149, it’s hard to say at this point whether the new Apple TV will gain much traction against less expensive competitors that do substantially the same things. But as I and others have noted, Apple TV will have at least one potentially compelling feature the others don’t have: universal content search via Siri, with deep links into individual apps.

Users will be able to search for titles, actors, directors and other criteria by voice command across multiple apps and then choose which service to use to watch the content you were looking for. As confirmed by Apple CEO Tim Cook in a recent interview with BuzzFeed, Apple TV will be able to tell you with a single search that the hulu_nocbs-1first three seasons of a five-season series you’re binge-watching are available on Netflix while the fourth season is available for purchase through iTunes and the fifth is available only on HBO, a provide you deep links to each without having to go through any particular service’s native UI.

Initially, universal search will only be available with iTunes, Netflix, Hulu, Showtime and HBO. But in the same BuzzFeed interview, Cook said Apple will open an API for any developer that wants their app included in Universal search.

“[W]e’ll have five major inputs into universal search initially. But we’re also opening an API, so that others can join in,” Cook said. “I think that many, many people will want to be in that search.” Read More »

Amazon Opens Fire On Apple TV And Chromecast

Amazon this week has left little doubt as to the scale of its ambitions in over-the-top video. Just days after Amazon-owned Twitch announced plans to roll out new tools for uploading on-demand content to the platform to better compete with YouTube, the e-commerce giant declared war on Apple and Google for supremacy on the set-top.

In a memo to Amazon Marketplace merchants, first reported by BloombergBusiness, Amazon said it would stop selling the Apple TV set-top box and Google’s Chromecast streaming dongle, both of which compete with Amazon’s own Fire TV STB and Fire Stick dongle. No new listings for Apple TV and Chromecast will be Amazon_Fire_TVaccepted the memo said, and listings for existing inventories would be removed as of Oct. 29th.

According to the memo, the items are being removed because they are not fully compatible with  Amazon’s Prime Video streaming service.

“Over the last three years, Prime Video has become an important part of Prime,” the memo said. “It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion.”

Translation: We can’t get our fully enabled Prime Video app onto iOS devices or supported by Chromecast because we refuse to fork over the 30 percent cut of in-app purchases demanded by Apple and Google. Read More »