Four reasons why TV Everywhere isn't ready for prime time: A simple look at a complex problem
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by Daniel Frankel
More than five years after its bold introduction, U.S. pay TV's highly complex multiscreen initiative, TV Everywhere, remains a work in progress.
There have been major breakthroughs recently, such as the record streaming audiences for the World Cup generated by ESPN and Univision. But for all of its considerable progress, most of the chatter surrounding TV Everywhere (TVE) is tinged with disappointment, with the pay TV industry still struggling to create a universal, consumer-friendly system for authenticating paid subscribers, not to mention educate a consumer base that's still mostly unaware that the initiative even exists.
Measuring audiences across platforms is still a big issue. And ad-delivery management is getting better, thanks to services like Freewheel, but it's still not fully baked.
"It's such a disaster, the consumer is never considered," says Richard Greenfield, a high-profile media-technology analyst for BTIG Research, who recently blogged about his trials and tribulations trying to binge-watch the FX series The Americans via TVE.
While pundits like Greenfield are particularly annoyed by the overall TVE user experience, it's the inability of the initiative to fulfill its underlying objective--to deliver content where consumers want it--that still seems most troublesome.
Indeed, 60-plus months after Time Warner Inc. chief Jeff Bewkes and Comcast chairman and CEO Brian Roberts first declared TVE a thing, the vastly complex web of rights issues still remains a central concern.
Delving into the matter of TVE content licensing, talking with executives for both pay TV operators and major entertainment conglomerates, all of whom insisted on speaking anonymously, FierceCable was able to drill down on some of the key challenges that have slowed the overall licensing process.
Here are four of the leading TVE rights issues.
1.) Content creators, particularly sports leagues, have taken a long time to come around to the initiative.
From TV production studios to major sports leagues, the mindset toward TV Everywhere, at least early on, was bit dissonant. Digital rights were considered to be separate and incremental from TV rights. Why, content creators wondered, would they just give away this potential gold mine? It took time for network executives to convince their content partners that digital rights were an inextricable part of TV's future.
"There was a lot of education that had to take place," said a top business development executive for a leading cable network conglomerate. "And for the most part, every studio has gotten their heads around the fact that their TV partners are going to need those rights."
Most of the sports leagues have started to come around, too. The NBA enables live multiscreen viewing in its broadcast contracts with Turner Networks and The Walt Disney Company, and a recent league provision has enabled regional sports networks to offer subscribers live, multiscreen access to NBA games, based on their broadcast contracts with individual teams.
But there are still some holdouts. Major League Baseball, which for years has enjoyed a digital leadership position with its own advanced media products, prohibits its teams from offering TVE rights as part of their individual regional sports network deals, for example.
And the NFL put TVE in the back seat in 2013 to sign a $1 billion mobile deal with Verizon, giving the telecom giant exclusive rights to stream in-market Sunday-afternoon pro football games on mobile phones. For CBS Corp. and 21st Century Fox, which had signed their own multibillion-dollar broadcast deal to show those same games on television, that was something to work around.
Beyond sports, studios and networks have not entirely given up on the notion that their digital rights have incremental value beyond TV Everywhere. And they often end up competing with TVE in order to exploit the deep pockets of Netflix and Amazon. This creates exclusivity issues among operators, often disrupting the consumer experience.
"This is an area that's still a bit unsettled," concedes the network business development executive.
Greenfield ran headlong into this dynamic when he sought over the spring to binge-watch both seasons of the FX spy drama The Americans. He had what he described as a very satisfactory experience watching the 13 first season episodes via Amazon Prime Instant Video through his Fire TV OTT device. But to binge on season two, he found himself bouncing back and fourth between his cable provider's VOD service and authenticated viewing on the FXNow website, with episodes dispersed confusingly across the platforms.
Confined to watching the first three season-two episodes on his laptop because FXNow lacks a player app, and subject to the same Burger King and Audi adds running over and over again, Greenfield found the user experience "torturous."
But what really burned him was when all season-two episodes were pulled from TV Everywhere access before he had a chance to see the last two episodes.
"We presume season two episodes are now all unavailable until they become accessible on Amazon [Prime Instant Video] later this year commercial-free," he wrote. "Our only choice to watch the final two episodes [before that time] was to purchase them for $1.99 each, which felt like an insult given that we pay a significant monthly cable video bill, along with Netflix and Amazon Prime subscriptions."
2.) Pay TV operators and programmers avoid talking to each other as much as they can.
In assessing why TV Everywhere rights deals have taken so long to develop, the negotiating dynamic between networks and MVPDs can't be overlooked.
"Once you make a deal with a programmer, you don't want to go back and open it up again," an executive for a mid-sized MSO told FierceCable. "That's just an opportunity for them to jack up your rate 20 percent."
This is a big part of the reason why TVE's vast web has so many glaring program rights holes. DirecTV subscribers, for example, were unable to view World Cup games on WatchESPN because the last programming deal made between the cable channel's parent, Disney, and the satellite company didn't include Internet rights. (Disney and DirecTV are now in discussions on including TV Everywhere rights in the renewal of their broader carriage deal, which expires in December.)
3.) The landscape for broadcast networks is much more complex.
While TV Everywhere negotiations are largely a one-on-one dialog between cable networks and pay TV operators, the complexity exists on a much higher scale for broadcast networks.
In order for a Big Four network to establish a ubiquitous, national TVE footprint, all of its major station groups--and even small independent affiliates--have to make retransmission deals with all the relevant MVPDs in their market.
This is a complex web of rights negotiations that is far from completed. In Los Angeles, for example, FierceCable sat in on a June panel featuring most of Watch ABC's top executives, including Albert Cheng, executive VP and chief digital media product officer for the Disney/ABC TV Group. It was an impressive display of how far TVE has come in terms of live streaming quality and advertising delivery.
Notable, however, was the fact that most of the people viewing the panel could not authenticate live video services on Watch ABC, because the local ABC owned-and-operated station, KABC-TV, doesn't have a TVE licensing agreement with the region's two dominant pay TV operators, TWC and DirecTV.
Further complicating TVE's broadcast proposition: Networks have been reluctant to have their affiliates establish TVE services without first making sure the digital component properly translates their branding and viewing experience.
"Stations run the gamut from big O&Os to tiny rural, independent outlets," said the head of affiliate sales for a major conglomerate. "Networks want to make sure their programming is displayed in a way that's complimentary to them, and they're not going to hand their programming over to some tiny station and just say, 'Hey, do what you need to do with this.'"
4.) Pay TV operators and programmers continue to fight over who controls the TVE experience.
Both broadcast and cable programmers look to establish the "network effect," whereby a number of similarly targeted, like-branded shows lead into and out of each other, each program cross-promoting the other, the advertising strategically positioned.
"We don't want to send Comcast a file and just say, 'Here, make it work," the affiliate sales exec said.
Added a pay TV executive: "There's a whole process for making sure the content provider is comfortable with just your authentication. They look at every single type of cable box you deploy. You may have the [TVE] rights for months before the product is up and running."
On the other side, pay TV execs are leery of how usernames and passwords are being passed around. Authentication technology has improved, a cable executive said, but he added, "We know for a fact that we're losing a lot of sales."
With this in mind, larger operators with the necessary level of scale--notably Dish Network, with its Sling-enabled DVR solutions--are trying to sate their customers' demand for ubiquitously available programming while still keeping their set-tops as a nexus.
Dish and media companies including Fox are currently deciding the validity of this approach in federal court. But again, it's one more example of industry dissension delaying the development of a unified solution that truly benefits the consumer.
"The fact that TV Everywhere is not ubiquitous yet isn't because of a lack of desire," the conglomerate sales executive said. "It will eventually get there. It's just a very complex initiative."