Pay-TV Networks Take Different Approach to Web Distribution Abroad
Pay-TV networks’ plans to distribute video online seem more aggressive outside the U.S., where executives said at an investor conference they're seeking to preserve the status quo and work with incumbent distributors. At the Nomura Media Summit in New York Thursday, executives from Discovery Communications, HBO and Viacom discussed their approaches to online video in the U.S. and elsewhere. HBO has the rights to distribute its network on its HBO GO smartphone and tablet product directly to consumers if it wanted to, CEO Bill Nelson said. If tablet PC penetration increases globally as projected, “we are going to move swiftly and aggressively to take advantage of that, either from a wholesale standpoint, or if the devices allow, in a direct to consumer product.” Nelson noted it could be years before that happens.
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Domestically, HBO is focused on increasing penetration among the existing pay-TV homes, Nelson said. HBO isn’t interested in trying to sell its product directly to the estimated 4 million U.S. subscribers who don’t buy TV service, he said. “We've done some research in that group,” he said. “That is not the target market for premium paid TV.”
Viacom is already being more aggressive with online distribution abroad, CEO Philippe Dauman said. In Canada, where TV networks may have some restrictions about the amount of American programming they can carry, it’s giving Viacom a way to reach more viewers and proving more lucrative, he said. “Netflix basically bought out the exclusive pay window” for Viacom’s Paramount studio output “and we received a much better value for Paramount than what the traditional distributors were offering,” he said. “Competition in distribution is always a good thing for content owners,” Dauman said. “It’s particularly good internationally because there are some markets that are closed to you, and now we have the opportunity to enter markets digitally where we're not allowed to do it through traditional TV.
Discovery wants to work with U.S. distributors on their TV Everywhere plans, but it needs to be compensated for allowing pay-TV subscribers access to its programming outside the home, CEO David Zaslav said. Cable operators are at risk of ceding the TV Everywhere market to new competitors if they don’t begin offering such services widely soon, he said. “We'd all like to be sooner, but it has to be measured before we as content owners are going to opt on to that platform."
Working with new, online distributors requires striking the right balance between the content Discovery makes available to them without alienating its traditional distributors, Zaslav said. “We're essentially platform agnostic,” he said when asked if the company would license its content to an online cable distributor. “For us, anybody who wants to pay for our content is a good thing,” he said. “We have to evaluate in each case who the player is and whether the value we provide helps us or hurts us with existing distributors in a particular country.”