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Execs at CES: MVPDs Should Embrace Online Video

LAS VEGAS — Although faster broadband speeds and the rise in over-the-top video are causing the traditional pay TV bundle to fray at the edges, execs at last week’s International CES agreed that multichannel video programming distributors must follow in the footsteps of companies such as Dish Network, and embrace new business models and offerings that are tailored to cordcutters and Millennials.

Tim Hanlon, founder and CEO of The Vertere Group, who moderated a session here last Tuesday (Jan. 6) about new “skinny-TV” bundles and a shift toward a la carte-like models, calls this “good-enough TV” — playing up the notion that consumers have become increasingly savvy at finding what they want and assembling their own bundles.

The onus is now on MVPDs to continue to deliver still-important live TV services, but to “embrace” OTT and bring it directly to their customers, Chris Thun, product lead at Fan TV, a company that’s now part of Rovi and has developed a platform that blends pay TV and OTT services, tying them together with a unified interface. Under that MVPD-friendly approach, content available from the distributor is prioritized, but the system still tells viewers how they could access shows from OTT sources. For Fan TV, which counts Time Warner Cable as a partner, “that’s a good trade-off ,” Thun said.

Evan Young, general manager of content, applications and advertising at TiVo, said: “Consumers are certainly not monolithic.” While TiVo applies most of its focus on devices that support traditional pay-TV services and OTT, its new Roamio OTA model, targeted primarily to cord-cutters, “does well in a certain segment,” he said.

Jeff Binder, CEO of Layer3 TV, a startup that has billed itself as a next-generation cable operator, argued that consumers generally “have not changed a whole lot,” but that the adoption of Web technologies and new navigation systems are poised to improve the pay TV experience and boost customer satisfaction well beyond what it was during the early on-demand era.

Despite a coming wave of new and smaller bundling options, Binder does not see an a la carte world taking shape in the near future. He noted that content owners that try to off er stand-alone services face barriers to entry.

“I don’t think that [bundling] model gets obliterated” by online video distributors of services like Netflix, Binder said. “Someone at the end of the day has to be responsible for aggregation. That’s a critical part.” He said he believes the “jury is still out” on the concept of self-aggregation.