October 20, 2008

Up Ahead: Consumers Will Pay Once For Content

While media companies want to charge for using individual platforms, eventually consumers will pay once for video content and access it on various devices in and out of the home and the country, execs said Fri at a Key Issues session at The Cable Center. "We'll only be able to charge once for content," Time Warner Cable evp/chief strategy officer Peter Stern said, seconding a thought from EchoStar Technology pres Mark Jackson. The critical issue is whether cable will have "the discipline" to preserve the 2-stream (subs and ads) revenue model, he added. He fears cable lacking discipline by putting shows online for free as it pointlessly pursues "the elusive 24-year-old male." The panel disagreed over whether a digital rights management (DRM) regime could be deployed to allow Jackson and Stern's single-pay scenario to become reality. DRMs just won't work like that, Buzzwire CEO Andrew McFarlane said. "There are no answers yet for the mobile side." Foundry Group managing dir Ryan McIntyre said such a DRM would not be "consumer friendly... DRM will always be too difficult to have a seamless solution." He envisions an a la carte world, where people downloading only what they want, and paying separately for it. Stern countered that Time Warner Cable has begun working on such regimes, pointing to a test in WI with HBO of a system called "Entitlement," where HBO subs can access HBO content without additional cost. Stern said such a system will be built in other systems throughout the country and eventually be used on mobile phones. "Consumers want to watch content on the biggest screen they have with them at the time," he added. At home, that usually means the TV screen, but on a long line at the DMV, it's the mobile phone. — An earlier panel concluded that Ted Turner's observation that he couldn't start TBS today has much validity. "There's so much competition today... it's much harder," to be a start-up than it was, NBCU distribution chief Bridget Baker said. AETN evp David Zagin agreed but noted the relatively recent starts of History Channel ('95) and Biography Channel ('98), although he noted distribution was aided by partners like Hearst, NBC and Disney. "There's no business without distribution," he said. Could AETN launch History today? We often wonder about that, Zagin said. Looking ahead, Scalar Media Partners ' Frank Hawkins said, "I don't think college students are watching TV today... It'll be interesting to see what [today's college graduates] do in five years... I think they'll be watching TV, but it will be different than [traditional TV viewing]. Zagin and Baker agreed that keeping Millennials watching TV is an "hourly discussion" at their companies.