The Future of TV: Platform or Service?

Amazon on Tuesday unveiled its expanded Prime Instant Video service and it seems to be more or less as advertised. Prime subscribers will now be able to add subscriptions to other over-the-top streaming services, including Showtime, Starz and an array of niche channel for prices ranging from $3 a month to $8.99 a month for Showtime, on top of the $99 annual price ($8.25 per month) for Prime.

Amazon SDDChannels can be ordered a la carte, and subscribers can change their line ups each month. Prime subscribers can also user their Amazon credentials to log in to any of the standalone apps for their add-on channels on other streaming platform, which means Prime subscribers can watch Showtime on Apple TV despite the absence of Prime on the Apple set-top box.

For the participating networks, the expanded Prime means forgoing a direct relationship with subscribers, as Amazon will handle all billing and customer service functions, presumably in exchange for a cut of the add-on subscription fees, while gaining the leverage of Amazon’s reach and merchandising strength. Read More »

Amazon’s On-Demand MVPD

At a congressional oversight hearing last month, FCC chairman Tom Wheeler indicated that his earlier proposal to classify certain over-the-top video services as “multichannel video programming distributors” (MVPDs), a regulatory term of art that applies to cable and satellite providers, was on more or less indefinite hold.

“The purpose of rulemaking is to learn,” Wheeler told the committee. “We learned that [a] vast number of things are developing very rapidly, and we have not moved forward on that notice of proposed rulemaking and don’t see, until situations change, we would.”

Among those “vast number of things,” no doubt, were Amazon’s confidential plans to bundle third-party OTT services in with Amazon Prime, monitor_globeallowing Prime Instant Video users to put together a package of OTT channels through a single subscription. As first reported by BloombergBusiness, Amazon Prime customers “will have the option of adding other online subscriptions to their accounts, including major, well-known movie and TV channels, and Amazon will also sell prepackaged bundles of its own creation…[T]he new feature may go live as soon as next month.”

The offering would “resemble something between a cable-TV subscription, though without live programming, and the online array of video offered through devices from Roku Inc., Apple TV or Amazon’s own Fire TV,” according to Bloomberg. Read More »

Broadband Rubicon Crossed? Cablevision, CBS Reach OTT Retrans Deal

Cablevision is boasting today of becoming the first cable or satellite provider to offer CBS’s OTT channel, CBS All Access, to its broadband subscribers.

The multiyear deal between the network and the MSO includes retransmission consent for CBS-owned stations and continued carriage by Cablevision of Showtime, CBS Sports Network and the Smithsonian Channel, in addition to CBS All Access.

“This comprehensive new agreement builds on our strong relationship with CBS and ensures that every Optimum customer gets the highly popular CBS content they want across multiple platforms and screens,” Cablevision EVP of programming Tom Montemagno said in a statement. “As the first distributor to agree to provide tony_sopranoCBS new Internet services, Cablevision continues to expand its portfolio of next-generation offerings, connecting customers to the programming they value when and where they want it.”

For those who have paid attention to Cablevision in recent months the CBS deal is no big surprise. The MSO has been drifting away from the traditional pay-TV model since it introduced its “Cord Cutter” package earlier this year that included broadband service and an over-the-air antenna for tuning in broadcast channels. It was also the first operator to offer Hulu to its broadband subscribers and was a launch partner for HBO Now. But the CBS deal represents the first time that Cablevision — or any other MVPD — has licensed an OTT service as part of a broadcast retransmission deal.

I’m not sure other cable ISPs would see that as something to boast about. Read More »

Cracking The OTT Ice On Live Local Sports

What a difference a spin-off makes. Barely a week after Major League Baseball’s 30 team owners approved the spin-off of BAM Tech, the streaming technology arm of MLB Advanced Media, reports surfaced that the league is drafting deal papers with Fox Sports to extend authenticated in-market streaming rights to Fox’s 15 regional sports networks (RSNs) beginning with the 2016 season.

Like most major sports leagues, MLB controls streaming rights for all of its teams’ games and game-related content. The league sells a high-end package of out-of-market games through MLB.com, but only the Toronto Blue Jays currently offer in-market streaming. The league and U.S. RSNs, led by Fox, have been negotiating Franklin_Gutierrez_hitting_HRover in-market streaming rights for years, but the league’s insistence that all streams be hosted by MLBAM –officially to ensure stream quality — has long been a roadblock to any deal because it would require Fox’s pay-TV affiliates to share subscriber information with the league during the authentication process. Under the deal now being finalized, according to the reports, Fox will handle authentication and fans will be able to access the games through their local RSN’s website, via the FoxSportsGo app, or through their service provider’s TV Everywhere app.

As part of the deal, Fox will still be required to use BAM Tech as its primary streaming technology vendor, and to pay a rights fee to MLB equal to around 4 percent of the team’s overall media deal. Read More »

Going Over The Top Without Cutting The Cord

Trying to figure out what the stealthy startup Layer3 TV is planning to unleash later this year has become something of a parlor game among pay-TV industry watchers. The VC-backed company, founded in Boston by two cable-industry veterans but now headquartered in Denver, has said little about its plans beyond its goal to become “a next generation cable provider spearheading a new era of home media, combining the best of television, social, and digital life.” How it plans to do that, though, remains a closely guarded secret.

The company’s name — Layer3 — refers to the 7-layer TCP/IP stack, specifically the packet routing layer, which may be a hint. And its two co-founders, Jeff Binder and Layer3 TVDave Fellows, are a couple of confirmed gear-heads. Binder was the founder of VOD systems provider Broadbus Technologies, which was sold to Motorola in 2006, while Fellows is a former CTO at Comcast and AT&T Broadband. So it’s reasonable to assume that whatever Layer3 is planning will leverage existing cable-cum-broadband plant.

The announcement of a second-round of funding in June that raised $51 million offered further hints.

“Cable television may have dominated the business press this year but consumers continue to crave a simple, yet elegant, solution for managing the newest innovations in video, social and digital,” Binder said in a statement. “Layer3 TV is the new cable — putting subscribers at the center of the universe by giving them seamless control of their entertainment relationships.” Read More »

The Unknown Unknowns Of Buying Sports Rights

The process of deciding whether to greenlight a movie in Hollywood involves a lot of variables and input from multiple studio divisions, but the math is pretty straightforward: Each distribution unit — domestic theatrical, international, home entertainment, TV, etc. — is asked to estimate how much revenue it could deliver based on the “elements” attached to the proposed film (script, director, stars), the genre, the proposed timing of its release, competing projects at other studios, and other such factors.  Each division, in turn, has its own methodology for arriving at its estimate, based on the track records of the stars/director/etc., the performance of “comparable” recent films, and so forth.

march_madness_tbs_cbsThose projections are then weighed against the project’s proposed budget and projected marketing costs, allowances are made for non-quantifiable variables (star relationships, etc.), and a reasonably well-informed gut call gets made.

The process of approving franchise sequels is even more straightforward since many of the numbers are hard-coded before there’s even a script. The movies may still flop, due to creative failures, marketing miscalculations or shifts in the zeitgeist, but at least the people making the call know what they can’t know.

Compare that with the challenge facing TV sports rights buyers. Speaking at the Second Screen Society’s Sports Summit in New York this week, executives from two of the biggest buyers of sports rights — CBS and Turner — highlighted the growing number of unknown unknowns facing sports buyers. Read More »

The FCC’s Imperfect Path To Increased Video Competition

The conditions the Federal Communications Commission has attached to its approval of AT&T’s merger with DirecTV are being met with a predictably mixed response. Some groups, such as Comptel, a Washington-based lobbying group representing Netflix, Amazon, Cogent Communications, Level 3 and other network operators and service providers, praised the FCC for requiring AT&T to disclose details of its network interconnection deals. Others, such as Free Press, blasted the conditions for not going “nearly far enough” to address the problem of pay-TV consolidation.

Here’s what we know, from a statement issued Wednesday by FCC chairman Tom Wheeler:

An order recommending that the AT&T/DirecTV transaction be approved with conditions has circulated to the Commissioners. The proposed order outlines Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearinga number of conditions that will directly benefit consumers by bringing more competition to the broadband marketplace. If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection. This additional build-out is about 10 times the size of AT&T’s current fiber-to-the-premise deployment, increases the entire nation’s residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve.

In addition, the conditions will build on the Open Internet Order already in effect, addressing two merger-specific issues. First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections. Second, in order to bring greater transparency to interconnection practices, the company will be required to submit all completed interconnection agreements to the Commission, along with regular reports on network performance.

Importantly, we will require an independent officer to help ensure compliance with these and other proposed conditions. These strong measures will protect consumers, expand high-speed broadband availability, and increase competition.

Read More »

From Over-The-Air To Over-The-Top

The over-the-top dam seems to be breaking for over-the-air broadcasters. Comcast announced last week that it will introduce a new streaming service called Stream later this summer, starting in Boston, that will offer access to local broadcast channels plus HBO and a mix of on-demand content for $15 a month. Seattle and Chicago will follow the Boston launch, with rollout to Comcast’s full footprint planned for 2016.

This week brought a new indications that over-the-air channels will also be core components of Apple’s planned OTT service when it launches later this year.

According watch_abc_tabletto a report in the NY Post, Apple’s talks with ABC, CBS, NBC and Fox are “rapidly gaining momentum” and now include access to the networks’ local affiliates’ feeds. That dovetails with an earlier report on Re/Code that the launch of Apple’s OTT service was being delayed to allow time to clear rights to local TV content.

According to the reports, Apple asked the networks to go back and get the streaming rights to their affiliates’ feeds. After initially balking, the networks agreed, and several major affiliate groups are now reportedly on board.

Previously, the networks had largely kept their content off third-party OTT platforms, preferring to launch their own proprietary apps like CBS All Access and Watch ABC. Read More »

Who Wants To Be An MVPD?

FCC chairman Tom Wheeler dropped a pretty broad hint last month that the commission is gearing up to reclassify at least some over-the-top video services as multichannel video programming distributors (MVPDs) as described in the Communications Act, putting them on roughly the same regulatory footing as cable and satellite providers.

In theory, the change could make it easier for services like Sling TV and Apple’s long-rumored subscription video service to add local broadcast channels to their Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearinglineups because it would extend the same retransmission consent rules to online video distributors as apply to cable and satellite providers.

Under the current retrans rules, broadcasters are required to enter “good faith” negotiations with any qualified MVPD for carriage of their signals. Similar rules, which presumably would also be extended to OTT services, require that cable networks owned by or affiliated with cable operators, such as the NBC Universal cable networks now owned by Comcast, must make their programming available to all other MVPDs.

Whether any OTT services actually want to be classified as MVPDs, however could be another matter. Read More »

FCC Unloads, Releases 313-page Report and Order on Net Neutrality

The full text of the FCC’s open internet order has now been released, along with 305 additional pages of exegetical elaboration and 79 pages of formal dissents from the two Republican commissioners.

ppcommissioners-nov-2013-webFrom an OTT perspective, there isn’t much in the full text that wasn’t already known from what the FCC released last month when it voted to approve the rules: The order’s “bright-line” rules against blocking, throttling and paid prioritization do not apply to commercial interconnection arrangements. However, the FCC will consider complaints regarding those arrangements and will take (unspecified) enforcement action if an ISP’s behavior is determined to violate the order’s “general conduct standard,” prohibiting actions that “unreasonably” interfere with or damage consumers or edge providers. Read More »

HBO Leaves in the Middle Man

HBO just can’t quit the bundle. With HBO Now, its new, over-the-top streaming service, the network for the first time is making its content available to stream without a pay-TV subscription. But HBO still hopes to sell it as part of a bundle. The only differences are the the other components of the bundle and the identity of the bundlers.

At launch, HBO Now will be sold exclusively by Apple and available on Apple devices only. According to HBO’s FAQ, “you can subscribe to HBO NOW using your iTunes account. Customers can access HBO NOW by going to HBONOW.com, through AppleTV® or by downloading the HBO NOW app in the Apple App Store®.” Apple and HBO will then share customer support duties. Read More »

Finger-pointing over interconnection

When a consumer’s OTT video stream starts rebuffering, or suffers packet losses resulting in degraded quality, it’s often hard to know where to direct blame. The problem is typically caused by congestion somewhere between the content’s originating server and the consumer’s receiving device. But exactly where in the chain of transit that congestion is occurring, and more importantly who is responsible and why, can be difficult even for engineers — and virtually impossible for consumers — to ascertain.

045448280-maclean-d-deshler-m-baldwinBack when it appeared the FCC was poised to classify interconnection arrangements between last-mile ISPs and third-party transit and content providers as a new, distinct type of Title II service the question of liability for congestion in the chain of transit suddenly became urgent for those involved in wholesale traffic exchanges. Read More »

Net Neutrality: Interconnection Covered, But Not By ‘Bright Line’ Rules

After a flurry of last-minute lobbying and internal debate the FCC ultimately backed off its plan to define interconnection arrangements between ISPs and third-party content and applications providers as distinct service separate from last-mile internet access service in its Open Internet order, which it approved today by a 3-2 party line vote. But the commission asserted its authority under Title II of the Communications Act to hear complaints and take appropriate enforcement action if it determines that specific interconnection practices by ISPs are not “just and reasonable.”

ppcommissioners-nov-2013-webThe decision to drop the separate classification of the service that ISPs make available to edge providers marks an apparent shift from the proposal outlined in the Feb. 4 fact sheet released by FCC chairman Tom Wheeler, which referred to interconnection and last-mile service separately. But it eliminates the potential legal problem for the commission’s authority to review interconnection arrangements that separate classification could have created. Read More »

For OTT providers, ‘strong’ Net Neutrality may be losing its strength

Don’t look now OTT fans but the net neutrality rules expected to be enacted Thursday by the FCC may turn out to be not as OTT-friendly as it originally appeared they would be.

FCC Commissioner Mignon Clyburn

FCC Commissioner Mignon Clyburn

When FCC chairman Tom Wheeler unveiled his “fact sheet” on the upcoming rules on Feb. 4, it looked as if the commission was poised to adopt the “strong” version of net neutrality pushed by Netflix and others. According to the fact sheet, the rules would treat interconnection arrangements between ISPs and third-party edge providers as a Title II service subject to the same “just and reasonable” standard that will apply to ISPs’ management of their last-mile networks. Read More »