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INTX 2015: Skinny Bundles Could Rationalize Video

CHICAGO – Former Fox chief operating officer and current Chernin Group chairman and CEO Peter Chernin said the advent of so-called “skinny bundles” won’t destroy the traditional bundle of video channels, but it will force programmers to rethink how they package their networks.  

At the opening general session of INTX: The Internet & Television Expo here Tuesday, Chernin said that while the industry is seeing an explosion in distribution with the increase in over-the-top and IP video offerings, it doesn’t mean that the traditional video bundle will collapse.

Instead, Chernin said the bundle will “rationalize in some ways. We’re going to see a tremendous explosion of new alternatives, largely IP delivered. Netflix is an extraordinary company; You Tube is an explosion of young demos. That will ultimately force the bundle to justify itself, which is not the worst thing in the world.”

Chernin added that there is opportunity for other companies to move into the advertising-based video on demand space, which has been dominated by You Tube over the past several years. Chernin said that increased video viewing on Facebook, Twitter, Snapchat, AOL and others can also help content creators in that there are more outlets for its content.

“Competition leads to leverage, and for the first time we’re seeing that,” Chernin said. “Personally, You Tube is a great distribution partner and deserves a lot of credit for building that business; conversely, the more competition the better.”

Comcast chairman and CEO Brian Roberts, who earlier demonstrated the cable operators new technology initiatives – including a voice activated remote and an integration of its XFinity Home and video platforms, said that over-the-top video actually is a benefit for cable operators, because it needs a reliable broadband network on which to travel.

“Video from the Internet is a great thing for our business,” Roberts said. Net-net it is powering our growth,” because it highlights the value of the cable voice, video and data bundle.

Roberts said he does not particularly love the term OTT, because, “it’s not going over anything, it’s going right through our broadband.” And he added that companies with strong brands will prevail.

Chernin agreed, adding that especially as technology allows consumers to aggregate their own content and create their own schedules to watch it.

“What will dominate in that world is strong brands,” Chernin said.