nScreenMedia OTT multiscreen media analysis

2013 a Banner Year for Linear TV Online. But why?

Over the last 12 months we have seen a steady flow of news regarding the delivery of linear TV channels online. Of course, the Olympics were the “main event” for live online in 2012. However, there were plenty of other online TV channel announcements from operators like Verizon as well as content providers like Huffington Post and Disney. Signs are that 2013 should see that steady flow becoming, at the very least, a raging stream.

The question is, why all this activity with linear TV? With the popularity of DVRs and the dominance of on-demand online, one might be forgiven for believing that TV channels have had their day. However, there are some solid reasons why this will not be the case, at least for the next year or so.

The first reason is perhaps the most obvious: we’re used it! Linear TV has existed for 80 years and virtually everyone on the planet has adapted their lives to this way of being entertained. As the saying goes, old habits die hard. There are still needs that channel TV answers remarkably well. At IBC last year I attended a debate entitled “Is Broadcast TV Dead.” During the debate, Nigel Walley, Managing Director of Decipher Strategic Advisors, argued that when you were tired at the end of the day and just want to watch something, a trusted channel is the best answer to satisfy the immediate need. On occasion, that has certainly been true for me.

Aereo TV is tapping in to this desire to bring along the venerable linear channel into the age of connected devices. With 117M smartphone owners in the U.S. today and 60M tablet owners, the folks at Aereo recognize there is an opportunity to continue to provide broadcast TV on these new surrogate TV devices. Operators like Comcast see the demand as well. The dominant US cable operator introduced a new service called AnyPlay last year which makes all a subscriber’s TV channels available on the home network and accessible from his tablet or smartphone.

I was chatting with Marty Roberts, Chief Marketing Officer at thePlatform, about this phenomenon and he confirmed that this year was going to be big for online linear TV channels. Many of the payTV operators the company is working with are planning on adding them to the on-demand content already available in their TV Everywhere deployments. As well, he suggested channel owners might find it easier to license linear channels to payTV operators. Aside for the fact that it would require no extra work by content providers to license the channels, Marty suggested there might be licensing differences between channel and VOD rights that make it easier to license the channel. Whether this is true for a particular linear channel provider or not, when negotiating with payTV operators for higher affiliate fees giving away online rights to the channel is probably one of the easier incentives to offer.

So, there you have it: a virtuous circle if ever there was one. Channel owners can give online rights for linear channels to payTV Operators to help get higher affiliate fees. The operators can add the channels to TV-Everywhere to increase value to subscribers. Subscribers have new connected devices which they want to use to watch video.  Broadcast TV still fills the couch-potato needs of tired viewers.

All of this adds up to a banner year for linear channels online. Whether broadband networks can handle all this video is another question. A subject we will return to in the next few days.

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