That's Entertainment

Capsule:  Wired distribution needs a new revenue stream, as well as a consumer-friendly mechanism for resolving network capacity issues.  Ditto for wireless, as AT&T and Verizon achieve near saturation on customer growth and a new Deutsche Telekom Sprint alliance threatens to stop handing post-paid customers over without a fight.  Both wired and wireless distribution need to anticipate content companies going directly to their customers, as well as the market entry of superior navigators Google and Apple.  What's big distribution to do? 

Advertising Age
Newser.com

TV Everywhere, the cable distribution effort to make broadcast and cable programming online free with a cable TV and broadband subscription, is planning a 2010 launch.  It should be a value-creator for wired cable distribution, as well as for satellite and telco TV companies whose participation has been suggested.

What TV Everywhere will do for distribution is enable PC screens to become additional TV sets for customers who have both TV and broadband subscriptions.  It will also encourage both TV and broadband subscription sales.  And, it will give the distribution universe some say in how TV content is presented online.  Given distribution's network capacity concerns, having a hand in the structure-setting mix for how TV shows up on a TV Everywhere screen will be important. 

What TV Everywhere will do for content companies is provide measurable viewership information integrated with online TV viewing.  A serious concern has emerged regarding set-top box viewership data on DVR's.  Current data extraction methods don't provide for DVR's and their dual tuning capacity, meaning that the most TV-centric households using DVR's are not included in set-top box viewing samples.  As TV Everywhere moves content online, the hope is that it will be rated through a universal standard like Nielson or an equivalent alternative. 

Moving content ratings competitions from the living room TV to the bedroom PC screen will likely change the world.  By de-emphasizing the common cultural TV viewing experience built on the linear progression of network programming, a new two-screen viewing system that collects ratings based mostly on the PC screen will require content to become PC friendly. 

The most significant example of what seems like PC friendly content today is the VOD-like episodic sampling navigation offered by every network website, by Google's YouTube and by Hulu and other aggregators.  Tying small slices of this content revenue machine into a meaningful financial system with room for growth will be a real challenge.  The music business sliced its content down to singles for increased customer satisfaction but has failed to create a revenue-generating infrastructure with expansion capabilities outside of Apple's iTunes, whose ingenious revenue build is directed towards the sale of Apple's devices, including its iPhone.

Distribution has not carved out a clear role for itself and its money-making needs in its Apple partnership.  AT&T has a few years of US iPhone exclusivity, which included a mildly glitchy launch period; but that will end as the iPhone smartly pursues its revenue expansion by opening up to more wireless carriers, from Verizon to a potential future combination of T-Mobile and Sprint. The wireless bedrock of revenue development--expensive calling plans tied into long-term contracts, with a la carte texting and data plans on top--doesn't easily accommodate charging for music outside ringtones or TV content.  It should.

The likelihood that both Google and Apple are about to do battle over content navigation and, ultimately, content sales is great.  Google just introduced a greatly enhanced music search engine that invites sampling.  What is sampling for, if not to sell?  Complex partnerships with potential advertisers will contribute some revenue growth, but we're growing past the idea that the advertising ocean is big enough to be endlessly fished without consequences. Google and Apple are creating virtual and real marketplaces where products, services and content will be sold without a plan for media distribution beyond themselves.

At the same time, Disney's Bob Iger is exhorting his company to develop enabling architecture for moving content from Disney's Keychest servers to multiple viewing platforms, including smartphones and game consoles like Microsoft's Xbox.  No one is talking publicly about what share wired and wireless distribution will have in this digital mix, although it's clear that content companies are finally on the move.  TV Everywhere will help, but it won't guarantee dominance over alternative content viewing, selling and sharing unless its participants break down some business and technology walls to favor the consumer.

Cable distribution has already passed through an important wall in its development of advertising and commerce applications.  A cable system knows who its customers are.  It has the best possible information on subscribers' home addresses, as well as on their broadband and digital TV modems' IP addresses.  Cable also knows the score on its customers' ability to pay for services since it bills directly with infrequent credit card accommodation and tight accounts receivable and collections procedures.

As a handful of interesting and potentially revenue bearing interactive TV and advertising applications are being brought to market, cable distribution should grab the remote and the mouse in the house by introducing a simple product that will improve TV viewers' choosing, viewing and buying experiences.  The significant legions of TV tune-in spots run across the very old commercial insertion status quo should be moved to a short-form VOD serving infrastructure.  This way, TV promos produced by the content networks to enhance ratings and subsquently left for dead inside an old-fashioned one-way distribution system can be brought to life. 

Enter a new world where :30 promos are "samples" of longer-form paid and free-advertising-sponsored-content that can be ordered and stored while you watch.  Using the passive TV viewing system where viewers are charmed and relaxed to activate the two-way world where content can be used online for watching, learning, shopping and buying seems like the right combination.

If every TV promo spot had a tag that enabled the interactive experience of storing the show promoted on the TV Everywhere system for later online or TV VOD viewing, cable customers could exercise their substantial immediate gratification impulses, now sitting stunted from retail shopping budget cuts. Think of the bonus in-store for PBS: the next time you see an enticing ad for Frontline, you'll be able to click on an icon and store it online and on TV.  We'd all like to be high-minded, if properly enabled.

And for viewers who are already firmly in the two-screen camp, clickable on demand online sampling, viewing and sharing will be magic.  When you see a promo for something you like, you'll be able to click on the promo with your remote and start watching it with a mouse-click online while you're still watching regular TV.  Because regular TV will be better-than-regular, you'll be able to program your week's viewing while watching The World Series or Sunday Football. 

As important, you'll be able to click on TV and online advertising to sample, to get more information and to make a purchase.  TV Everywhere should make a clear and aggressive claim on both the tagging of TV and online promos for the best of their content, and the tagging of advertising for the best future opportunities for TV-linked commerce.  Big distribution has a chance to take a piece of commercial sales for its platform's contribution in bringing the TV programming to the buyer that makes the commercial more attractive.  If they can find it in their imaginations, distribution might also strike small slices of credit relationships with financial institutions that can provide an e-and-t-credit platform like PayPal, making purchasing from TV ads easy without credit card numbers and security codes. 

Content companies, starting with QVC and HSN, should be all over this execution, as superior to their current interactive presence.  Home shopping was huge in its original cable implementation.  If home shopping networks shift course to become network background services with short tagged TV and online segments in the foreground, a shopping renaissance could ensue.  Shopping networks have few better alternatives than a new viewing and buying system that enables their claim to some of the revenue that is being pulled into online systems led by online distributors like Google and Apple, as well as online commerce aggregators like Amazon and eBay.

But the best part of a new clickable TV promotions and advertising capability will be better TV navigation.  Some of the latest examples of navigation progress include mosaic screens offering multiple picture-in-a-picture experiences separated by genre.  A news mosaic in an octa-box gives the viewer eight live screens of eight news networks simultaneously.  The big simple win on the elegant mosaic is a somewhat enhanced ability to see what's on and help changing channels.  There's more out there inside the wired distribution toolbox that can bring new life to the TV experience.

Wireless distribution can take a piece of the new clickable storable sampling, viewing and buying future.  By engaging wired distribution partners and enabling their applications on wireless phones, Verizon and AT&T can work with their own Fios and U-verse TV product as well as Comcast and Time Warner to enable remote viewing of saved content online.  If Verizon and AT&T don't move in this direction, they risk handing over their future capabilities to the iPhone and the Android.  That progression has already begun.

TV and advertising navigation won't be complete without some distribution combination of wired and wireless systems.  Moving content between the TV screen and the PC in the home will be great, but carrying it or a facsimile on your mobile devices will be greater still.  Print brands who already have libraries of video content that helps tell their stories will have a substantial place and revenue opportunity in a world where short form videos--the art-form formerly known as "commercials"--are the key to every kind of online and mobile content, including newspapers and magazines.

An inter-locking secure system for moving content online, on TV and on mobile devices will be a guaranteed draw for the content community.  It will likely be better than the current online viewing choices, where every ad shares some revenue generating potential with Google. Short of doing it themselves, big distribution will see alternative providers develop similar systems and credit facilities that are less expansive and potentially more expensive. That could be bad news for the consumer and the media, tossing TV in all of its potential interactivity to an online world currently defined by flat display advertising, flattening search values and YouTube.