"Distribution is becoming very fragmented and very ubiquitous
and the consumers view devices as interchangeable -- they don't get
all the distinctions," said Mike Vorhaus, president of Magid
Advisors at Frank N. Magid Associates. "So what you're left with is
content."
During his keynote, Verizon CEO Ivan Seidenberg said the company
is building out a fiber and wireless network more than capable of
keeping up with the explosion of video, which accounts for 50% of
internet traffic today and is expected to grow to 80% or 90% in the
next few years. But it turns out getting content on those devices
is an even tougher technical hurdle.
Little wonder, then, Mr. Seidenberg's surprise guest on stage
was Time Warner CEO Jeff Bewkes, who showed a humorous montage of
personalities including Conan O' Brien, Ellen DeGeneres and Mr.
Bewkes watching themselves on screens of all sizes: TV, PCs,
tablets and phones; tellingly, they were all pleading with the CES
masses to help them become more easily available on these devices,
a concept Mr. Bewkes famously coined as "TV Everywhere."
The Time Warner CEO has spent the past 18 months evangelizing
the concept that one cable TV subscription would get people access
to content anywhere. But a uniform, consumer-friendly system for
authenticating cable subscribers on multiple devices doesn't yet
exist.
"We have every distribution network and content company trying
to create a uniform approach for this," Mr. Bewkes said. "Let's try
to keep it simple. This is the best room in the world to develop
the innovation to make this happen."
As if to offer its own version of Mr. Bewkes' plea, another CES
keynote, Samsung President Boo-Keun Yoon, announced partnerships
with Comcast, Time Warner Cable and Hulu, sharing the stage with
both Comcast CEO Brian Roberts and Time Warner Cable CEO Glenn
Britt to present what the Korean conglomerate is calling "Smart
TV." The companies have collaborated to allow cable subscribers to
seamlessly switch what they're watching, from their iPads and
Android-operated tablets, such as Samsung's Galaxy, to their TVs or
phones. But consumers still won't be able to watch their
Comcast-subscription channels on these devices outside the home,
falling short of Mr. Bewkes' TV Everywhere ideal.
While the new generation of connected TVs is capable of
bypassing cable TV, old media still dominates the discussion and
many devices are agreeing to play by old media's rules. For
example, Microsoft Xbox's latest content addition, Hulu Plus, is
all about subscription media. It has added Hulu Plus, a monthly
subscription for online access to premium TV from the joint venture
owned by NBC Universal, News Corp. and Walt Disney Co.
In this brewing content battle, the cable operators are still
insisting on maintaining their foothold on consumers and have thus
far been sluggish to fully adopt authentication software that would
allow cable subscribers to view premium content such as original
cable shows on any device -- whether inside the home or out.
They're approaching TV Everywhere in a defensive posture, offering
just enough TV Everywhere-like features as a way to retain current
subscribers and also to stem consumer demand to pay a la carte, or
get their TV content exclusively from the free web.
That leaves advertisers and media buyers trying to anticipate
how this brewing content-device battle will play out. Bill Tucker,
CEO of Publicis' MediaVest, said
marketers have been increasing their investment in what they
earmark as "innovation budgets" to keep up with the rise of media
on other platforms. "If we can't figure out how to fuse content and
context together now, we're not going to be able to do business
long-term," he said.
Until recently, the tech industry had little interest in helping
TV networks preserve their model. But despite a proliferation of
screens, consumers are watching more TV, according to Nielsen.
Google's recent attempt to get in front of TV screens with GoogleTV
was met with resistance from the networks and cable companies, who
blocked their free web TV content to the GoogleTV browser. "The
lesson we learned from GoogleTV is that if you don't have the
content people want, no one's going to buy your device," said
Revision3 CEO Jim Louderback.
Meanwhile, TV manufacturers, hoping to trigger a three-year
upgrade cycle like that of PCs, are developing richer interactive
TV platforms to differentiate from one another. The result:
Samsung, Vizio, Sony and Intel all have different app ecosystems,
all starving for what people buy TVs for: the programming.
~ ~ ~
With reporting by: Andrew Hampp
