nScreenMedia OTT multiscreen media analysis

Broadcasters will fight to define online TV role

CBS All Access

The fights between broadcasters and Aereo and CBS and Dish Network illustrate the changing world for over-the-air TV channel providers. Online TV is very different to the heavily regulated broadcast and cable worlds, and broadcasters will fight tooth-and-nail to control their role in it.

In the world of over-the-air delivery, broadcasters have learned how to prosper in a heavily regulated market. In exchange for the exclusive use of the scarce resource of the public airways, they accepted FCC regulation to ensure they served, at least somewhat, in the public interest. When cable came along, government stepped in to make sure local broadcasters were carried on the systems with “must-carry” legislation, and nominally compensated for their content. Every three years, broadcasters can opt out of “must-carry” and require retransmission consent from pay TV operators and negotiate their own deal.

It’s fair to say the big four broadcasters and their affiliates have prospered under this system, and local broadcasters made a pretty decent living. However, the Internet threatens to upset the cozy world that has grown up over the last 80 years. And that is why broadcasters are ready to go to the carpet with anyone that attempts to usurp their authority for self-determination online.

To be successful online broadcasters are going to have to completely reinvent the way they think about their business. Broadcast channels are, in a large part, the result of the medium upon which they are delivered. The requirement that they serve the public interest led them to be generalists; providing a mix of entertainment, news and local interest content. The restriction of broadcasting itself led to strict show timings and advertising formats.

Online, there is no government regulation of content providers, and it’s hard to see how any scheme could be brought to bear to enforce a “public interest” standard. Most web content providers tend to be specialists, zeroing in on a particular content genre or audience. Bandwidth to deliver is not scarce and anyone with a website has a means to deliver content to any of the 90+million US broadband households. And the necessity to adhere to a specific broadcast time and show length is an anathema to the online video viewer.

With this as the backdrop, is it any wonder that broadcasters swore to fight Aereo to the bitter end? Sure, they were upset about the fact that they were not being compensated, but allowing a tiny tech upstart to define their online existence would have been a total disaster. Particularly since Aereo was leading with a broadcast channel, which has questionable value online. Similarly with CBS and Dish. During the negotiations, CBS was already planning to deliver “All Access”, a more modern approach with broadcast channel and on-demand library. Why let Dish deliver a product less fit for online consumption?

Unlike in the traditional television world, the Internet affords broadcasters no special privileges enshrined in law. They are just one of any number of other content providers fighting for the viewers’ attention. This is a battle Netflix, Funny or Die and even we here at nScreenMedia fight on a daily basis. It is just too risky for a broadcaster to allow anyone else to fight that battle on their behalf.

Why it matters

Television broadcasters have enjoyed a privileged position, supported by laws and access to scarce broadcast resources, in the delivery of their content to consumers.

None of these privileges extend online. Broadcasters will have to fight for their audience like every other web content provider.

Broadcasters will fight any attempt to usurp their ability to position their content online as they see fit.

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