Over at SXSW, CNN has announced that it’s about to drastically increase its audiences’ options for consuming video—provided they pay their cable bill. To understand the import of the “TV Everywhere” business model on which the new services will be based, it’s good to think a bit about the economics of putting television news content online.
Streaming live broadcasts to the Web is a tricky thing for television news divisions from an economic perspective. Occasionally, for major events like election night or the State of the Union address, they will publish a live feed. But, as Andy Plesser pointed out at this year’s Online Video Journalism Summit (First video, 51:38), cable providers pay fees to run the same content and are none too happy when it appears online live for free. This is true even for over-the-air (OTA) television content, since cable providers pay a retrans fee to package “freely” broadcast content with their offerings. And it’s especially true for cable channels, which are a cable provider’s bread and butter.
As has been pointed out elsewhere, both broadcast networks and cable channels, who generally share the same corporate parents anyway, are very sensitive about their relationships with cable providers. At the same time, you will see most broadcast and cable news programs online in the form of clips—and/or in their entirety—as little as ten minutes after they’ve aired. A major reason for this is that when they’re not available from the source, popular clips quickly get bootlegged to YouTube and other video sharing sites. If the television outfit doesn’t get its own embeddable clip up as quickly as possible, much of the online traffic will go to unofficial copies of the segment, rather than to the news provider.
Moreover, unlike entertainment programming which is put online by the networks in delayed limited time windows, and with numerous viewing restrictions, news content needs to be timely and is generally understood to be perishable. People may still be circulating bootleg copies of Star Trek decades after it was canceled, but few people will want to view an Anderson Cooper clip two days after it originally airs. There are thus competing economic forces that determine when television news content goes online—it cannot be posted live, or it will ruin lucrative TV distribution deals, but it should be as close to live as possible or it will conversely ruin the online revenue stream.
At the Online Video Journalism Summit (First Video; 55:25), Toppo framed TV Everywhere, which requires cable customers to authenticate themselves as subscribers, but subsequently allows them to access television programming live on the Web, as the ultimate solution to this problem. Companies like Time Warner and Comcast, which now owns CNN competitor MSNBC, are also enthusiastic about TV Everywhere for obvious reasons. And even some frequent critics of the strategy, like the folks at GigaOm’s NewTeeVee, have suggested that it will ultimately be one of few viable options for broadcaster-owned online video sites like Hulu and TV.com, as their corporate parents become less enthusiastic about putting content online for free. Others, however, like MediaShift’s Mark Glaser have painted TV Everywhere as a business model that’s volatile and ultimately doomed to failure, suggesting it will work out about as well as paywalls have for newspapers. Of course, the jury’s still out on that.
In any case, here’s the rundown of CNN’s new online video features, via NewTeeVee:
16×9 format HD-quality video online, with up to 6 Mbps bit rate encoding.
Availability on the iPhone, iPad, Google TV-powered connected devices and soon Android mobile phones and tablets.
The ability to create personal playlists—in a sense, the ability to create and program a CNN channel based on your own interests.
Access to short-form video clips, entire on-demand episodes and live streaming of the shows that are currently on TV.
The ability to pause, as well as scrub live video backward and forward.
Pause and shut down a stream on one device, such as a PC, and resume watching on another device—like an iPad.
A lot of this was prefigured at Beet.TV’s aforementioned Online Video Journalism Summit last month, where Mike Toppo, CNN.com’s Senior Director of News Operations and Productions spoke of his love for the iPad and what he saw as the promise of TV Everywhere (First Video, 55:25).
Author’s Note: I do dissertation research on this topic. You can see my “Editorial Standards” page and information for newcomers for any questions about my relationship as a researcher to MSNBC (the short version is that none of the facts or analysis here rely on any inside knowledge of MSNBC or its Web operations, nor of any of the other Websites mentioned).