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Shedding Tiers, Recalibrating Scale, Seeing Stars

Takeaway: Integrated video programming and overhauled delivery structures were pondered but not deeply discussed in Los Angeles. Meanwhile in New York last week, the online video business looked like cable circa 1980s -- primed to ramp-up formidably.

The most enlightening conversation I had in Los Angeles last week came on the day before the Cable Show began, aptly framing the tension of industries in transition. I had breakfast with a collegemate who has been an A-list Hollywood producer for 30 years; his credits include celebrated titles you know well on big screen and cable and broadcast networks. (I'll eschew name-dropping to protect his privacy; just trust me.)

He is fascinated with the new digital distribution options, and is negotiating with BuzzFeed and other broadband programmers to create shows for new media.  But, he says, his big studio collaborators are skeptical: to them, such productions don't scale to the levels of tentpole movies they want.  They know digital distribution options exist, but after nearly a decade of pondering, the stalwarts of entertainment empires still don't know how to recalibrate their thinking about scale for the new platforms.

My pal's outlook hit home the following day at the Cable Show's first General Session, when Suddenlink Communications chairman and CEO Jerry Kent advocated that the industry must find new forms of content bundles, what he called “more affordable types of programming” including dropping “certain programmers because they’re too expensive.”  Although Kent stopped short of endorsing à la carte programming, his remarks suggested that cable operators should -- and some are -- shed tiers or at least rearrange their program line-ups to meet viewer needs.

 Similarly, Liberty Global president and CEO Michael Fries, on that same opening panel, acknowledged that cable is "competing with hyper-giants who can roll out networks overnight without building infrastructure.”  Although not specifying Facebook, Google’s YouTube or other digital distributors, Fries’ remarks underscored the emerging competitive landscape, which (as it turned out) was a theme of FCC chairman Tom Wheeler's message the following morning.

Meanwhile, as this soul-searching was transpiring in L.A., far more aggressive competitive video visions were actually taking shape in New York. Many of these plans involve familiar cable faces such as Sarah Jessica Parker and Steve Buscemi plus popular talent including James Franco, Zoe Saldana, Ellen DeGeneres and Kevin Nealon.  Those are a few of the names in new shows for the expanded AOL On Network original programming lineup, unveiled at the "Digital Content NewFronts," the broadband content industry's version of TV upfront ad pitches. AOL also announced its first long-form series Connected.

Even more significantly AOL revealed that Nielsen will provide "truly TV-comparable audience measurement" for all new AOL series. The beta test of the Nielsen Digital Program Rations, which now measures TV-originated content when it is viewed online, will let advertisers compare Gross Rating Points for broadband and television content.

That's where it gets competitive.

The Digital NewFronts also had a semblance of cable's transformative period 30 years ago when big advertisers began committing budgets to the new channels.  For example, BuzzFeed, which has video advertisers such as GE and Purina, emphasized its efficient scale compared to both broadcast and cable. Founder Jonah Peretti stressed that video is the biggest shift in his company's agenda, reminding advertisers that the popular site plans to move beyond mindless quizzes and celebrity squibs into extensive video delivery online.

Ze Frank, the company's executive VP of video, described how "social video" exceeds the value of "consumable video" (his term for today's TV and film programming.

Yahoo revealed its alliance with LiveNation to video stream one live concert every day for a year, including behind-the-scenes material to accompany each show. Kellogg will sponsor the series.  Yahoo also previewed its "Originals" schedule, which includes Sin City Saints about a Las Vegas basketball team and Other Space, a comedy sci-fi series.   

Among dozens of video-centric plans unveiled in New York were ones from Microsoft Xbox Entertainment Studios president Nancy Tellem, a former top CBS executive, who showed original content under the curious - and threatening - slogan: “This is Where TV Wants To Be.” And The New York Times is re-launching its Times Video operation, organizing channels under banners such as Op-Docs, Modern Love, Vows and Verbatim, a new series of court transcripts read by comedians.  

Such concepts bring to mind the "try-anything" approach of HBO, Showtime and other networks during cable's incubation era in the '80s.

We return now to the Cable Show in Los Angeles, where operators were continuing their revered practice of omphaloskepsis, occasionally confessing that efforts to expand into new media have been frustrating.  Yet there were signs all around about the structural changes.  The exhibit show floor was a showcase of software companies, far more vital today than hardware upgrades.  Vendors were showing software for managing the next generation of operations -- not merely devices to delivery video.  (Also significant on the show floor and on stage was the paucity of celebrities, long a mainstay for cable shows - especially in Los Angeles; but that's a different topics.)

The re-launch of  TV Everywhere promotions, as presented by CTAM, may change cable's ability to hold its own in the evolving video landscape. At sessions such as the "Feeding the Screen" panel, network executives admitted that they face fundamental barriers to expanding TVE.  

"You have rights issues and the tension between advertisers and distributors," explained Mike Biard, president-distribution at Fox Networks.

Tonia O'Connor, president-content distribution at Univision Communications, offered an enlightened way of addressing the new video landscape.

"We're looking beyond our core audience, looking to 15-to-34 year-olds," she said.  "They have a very broad definition of television."

That revamped definition of "viewing" plus the need for new structures is at the core of the industry overhaul that was an unspoken theme in Los Angeles last week. In the exhibit hall and on panels, technology wannabes were laying out a new agenda.  Startup companies such as aioTV  showed its side-car add-on to any set-top box, enabling integration of linear TV and broadband video. At a Technical Forum session on content delivery networks and "streaming clouds," Comcast Fellow Brian Field presented a well received vision about virtualization and application/caching built to the new scale.

Startups such as Frequency were on hand to pitch content integration for TV online. And Imagine Park was loaded with dreams of new visual experiences and user interfaces.

My pal the Hollywood producer may actually see his visions take shape.