Egypt and OTT

The turmoil in Egypt has everyone on edge, but the open revolt of an oppressed people always serves to remind us that those who have had enough eventually rise up. They eventually rebel, no matter what the costs. And the regime in power must make a key decision: Crush the rebellion with overwhelming force or try to appease the masses with “reform”—or at least something that looks and feels like reform. Not to compare the life-and-death stakes in Egypt to those surrounding recent changes in the media business, but the idea of people rising up and challenging convention does seem similar when it comes to “over the top” media in recent years.

 

The first digital OTT play was Napster in the 1990s. As in Egypt, the popular groundswell of people trading MP3 music files caught the entrenched regime completely by surprise. The music industry chose to crush rebels with lawsuits and brute force, which killed Napster but antagonized an entire generation of music consumers (and did little to contain piracy, which continues on many platforms to this day). The business has never been the same, and TV and movie moguls have pledged to avoid the same fate. Sure, there have been lawsuits (mostly from the movie biz side), but overall the video content business has tried to accommodate viewers’ demands that they be able to watch content anywhere, anytime, anywhere. Movie studios have done deals with OTT plays ranging from Netflix to Sony’s Playstation 3 gaming console. But cable has done even more…

 

In the cable universe, the response has hinged on authentication, giving viewers who pay a cable, telco or satellite distributor for linear TV a way to access that content in various forms online and on mobile devices. So far, so good. But it’s early. And like Hosni Mubarak firing his cabinet and appointing a close friend as Vice President, the idea that you still must buy all that linear content first before being able to access it on-demand on other platforms seems like false liberation to many TV fans. They want the ability to buy everything a-la-carte. Others won’t be satisfied until everything is not only a-la-carte but also completely free, presumably supported by advertising. Perhaps someday—in a world of hyper-targeted ads, no privacy and nearly ubiquitous brand integration into every facet of programming—advertising and marketing could support this vision. But for the foreseeable future… it just ain’t gonna happen (and it’s unclear whether most TV fans would want to live in such an advertising-laden world anyway). The dual-revenue stream feeds the beast. And no other economic model supports such diversity of content. Someone has to pay for this stuff.

 

Revolutions can be messy. And as we’ve seen in Egypt, what starts out as jubilation can often morph into looting and rioting as darker forces infiltrate the movement. But sometimes regimes just need to adapt to avoid their overthrow. Many people—especially Web-savvy young content consumers—may view the linear pay TV model as oppressive, giving them few choices and an all-or-nothing approach. For the YouTube generation, the current pay TV model doesn’t make any sense. And to them, managing Internet traffic to shut off bandwidth hogs using OTT platforms seems akin to Egypt’s rulers shutting off the Internet so protesters can’t communicate. But as the cable industry realized years ago when it tried to explain its business model during the debate over the 1992 Cable Act, people just don’t care about the economics of the business. And even if they did care about it, many probably wouldn’t trust that the industry was telling the truth. That lack of trust is unfortunate, but it simply reinforces the idea that cable must work harder than ever to keep its customers happy and convince them of cable’s value.

 

So what to do? Through authentication and other efforts, cable and other distributors have probably done all they can to strike a balance between preserving the old regime that puts food on cable’s table and giving the revolutionaries more freedom. And while perhaps ludicrous to compare the desires of TV fans to the aspirations of oppressed Egyptians, some viewers and public-interest groups seem to see this as a similar fight to free the public from TV bondage. Will authentication and more flexibility keep the masses from burning down the city that the industry took 50 years to build? Only time will tell.