Los Angeles – Turner Broadcasting Systems CEO John Martin threw down the TV Everywhere gauntlet at the 2014 Cable Show’s Opening General Session Tuesday, saying that for cable operators and networks to thrive, they need to simplify the way that customers access content from any device, anywhere and at any time.
“If there is a call to action at this show it is this: For programmers and distributors to work together to improve the consumer experience,” Martin said at the opening panel entitled Brought to You by Broadband: the Faster, Better, More Entertaining Future.”Authentication, or this concept of authenticated usage, is a barrier to usage.”
Martin then guessed that most people can’t remember the operator-provider passwords for their TV Everywhere service.
“I have three homes with three different cable providers and I don’t know any of them,” Martin said. “I don’t have TV Everywhere because I can’t figure out how to use it. We have to work together, we have to make it easy, we have to make it consistent. I think the idea over the next five years to dramatically improve the availability and robustness of video on demand is the biggest opportunity that we together can create.”
A+E Networks president and CEO Nancy Dubuc echoed Martin’s concern, noting that her networks’ TV Everywhere app has been downloaded more than 11 million times across its three core brands.
“But the authentication of those downloaded apps is not great and that means it is too difficult to do,” Dubuc said.
ESPN president and Disney Media Networks co-chairman John Skipper said the authentication process needs to be easier to complete.
“The people we are competing with in Silicon Valley, they do this by implication, once you have something they can sniff out the content and deliver it. We need to be just as easy as what they do.”
Time Warner Cable chairman and CEO Rob Marcus argued that cable operators have made great strides in making TV Everywhere more accessible. But he admitted there is work to be done.
Time Warner cable’s TWC TV app is now available on eight different platforms, including iOS, Android, Xbox and Samsung Smart TVs.
“I agree the process of authentication needs to be even easier, but the early returns are quite good,” Marcus said. “Last month we had 1 million unique users accessing our video product via something other than a set top box, I think is pretty significant.”
Dubuc added that programmers want to see TV Everywhere succeed, adding that without content, technology firms are “just building platforms.”
“We like the cable model, we like our dual revenue stream,” Dubuc said. “I don’t want it to go away.”
While programmers and distributors had no problem agreeing on the value of mobile content, they have been at loggerheads concerning the cost of that content to distributors. During the discussion, Suddenlink Communications CEO Jerry Kent echoed many distributors’ concerns that the high cost of programming could force operators to either drop networks or raise prices to a level that would squeeze a large segment of the population out of pay TV.
“I’m concerned we’re going to reach a tipping point, pricing some households out of the market,” Kent said. “We need to have the flexibility to offer more affordable types of packages.”
Kent said that doesn’t mean being able to offer ala carte, but being able to include and exclude certain networks from lower priced video offerings that would be attractive to customers.
Skipper and Martin added that the costs are rising for programmers, too, who have to compete with online outlets like Netflix, Amazon and Yahoo for content.
Skipper, while agreeing that ESPN is the priciest basic cable network, argued that it also delivers the most value. And it is that value that distributors and programmers alike should focus on.
“Our job is to create value and help distributors sell products in their markets,” Skipper said. “There is no doubt we’ve created the product with the most value. ESPN is the most expensive, but it is the most valuable. We work very hard with our partners to create value – we were the first in the market with authentication, w were the first in the market with an HD channel, we were the first in the market with a 3D channel. We’re open for business to do things to create value.”
Skipper also disputed claims that only a small portion of households actually watch ESPN, although all have to pay for it. He added that about 115 million people consume ESPN every week.
“This is a $70 billion business and we’re making money,” Skipper said, adding that distributors never complained about the price of the network when the entire cable pie was growing. “We’ve got to figure out how to sell the value of the pay TV subscriber. If you’re going to have a stagnant market we’re all going to have pressure. …We’ve got to figure out a way to grow the pie if we are going to remain together as a group.”
Marcus added that operators also need to press harder in getting customers to see the value they are currently getting from their cable subscription.
“We’re falling into the trap of focusing on programming costs,” Marcus said. “It is incumbent upon us to tout the value we provide to our video customers every day.”
He added that the average cable subscriber pays about 20 cents per viewing hour for his or her subscription.
“That’s well worth the price of admission,” he said.
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