How Will Streaming Video Hit Traditional TV?

In the wake of broadcast networks’ controversial decision to block their Web sites from Google TV devices, the power of the broadcast and cable networks to determine how their content will be viewed is top of mind everywhere from Silicon Valley to Hollywood and New York. I was hoping that a panel that was to include executives from NBC Universal and CBS would shed some light on the logic (or at least provide some fireworks), but those two panelists dropped out, as did ESPN and Turner Broadcasting executives on an earlier panel. Apparently fireworks is the last thing these folks want.

Nonetheless, there was plenty to talk about at the Streaming Media West panel “How Streaming Video Is Changing the Television Landscape.” On the panel: moderator Paul Alfieri, VP of communications and marketing for Limelight Networks; Sibyl Goldman, VP of entertainment at Yahoo!; Bhavesh Patel, VP of interactive media at Fox Sports International; and Lenny Altschuler, director of multi-platform marketing at Televisa.

Q: What’s going on inside a media company like Televisa with regard to moving TV content to new platforms? Altschuler: After joining the company last January, I pitched the idea of moving Televisa content to other platforms beyond the TV.

Q: How is Yahoo looking at monetization of streaming video especially for big advertisers like P&G. Goldman: Measuring success in TV is changing. People are watching TV in more diverse ways. At Yahoo, we’ve been rolling out tons of new ad formats. Like on Yahoo Mail, there are “large, juicy” ad formats for shows such as NCIS. If the player is front and center and there’s not a lot of other action going on, that’s engaging.

Q: When you talk to advertisers, do they see interactivity in ads, especially video, as a layer on their core strategy, or something distinct? Goldman: There’s a shift to video being more prominent. There’s more willingness to take risks.

Q: How is Fox Sports looking at streaming video in terms of monetizing that business? Patel: We’ve always been a subscription business. That’s how we got the cash flow to buy sports rights, which are expensive. Subscription businesses have utility not only on television, but the unknown of the iPad or the Roku or even on the PC browser.

We’re transforming negotiations with sports providers to cover not just TV but all the devices that consumers are choosing to use. We launched an iPhone app a few weeks ago, with an iPad app coming soon. It’s not certain what subscription model will work there.

In sports, people don’t really want on-demand content. That’s not the way you consume sports. The technology is here now to watch sports live online. We have no desire to bypass anyone, like the cable companies.

Q: How is your relationship with the cable providers like Comcast, given your effort to establish your own brand online? Patel: The consumer’s looking for it. While our business partners may not appreciate (our offering people content online), we don’t want to lose the chance to serve that audience. But he implies that people may get tired of paying $10 here, $15 there, vs. bundling that the cable companies could provide. So that’s what they’re talking to the cable companies about.

Q: How do you decide how much to drive traffic to your own site vs. partners such as portals? Patel: A few years ago, we would have had the mindset that it’s all about sending people to our site. At least in my vertical, sports rights are so expensive that you have no choice but to share. You can’t monetize those properties only on your own sites. So have a partnership with MSN, had one in the past with Yahoo.

Q: Is the industry ready for cord-cutting? Patel: For my audience, when you move (to a new place), you need to make that decision. When I moved out here, I was very close to not signing up at all. But there was no sports. Without cable, you can’t watch it. That is a very valuable thing. That is one of the biggest reasons that business is not going away anytime soon. Maybe the business will change. But people need to pay for that.

Altschuler: Cord-cutting is a transitional thing. In Mexico, I’ve cut the cord. I watch everything online. It’s because my traditional experience doesn’t work for me anymore. It’s generational. The programming grid is too confusing. Cord-cutting is real. But it’s temporary until we as an industry come up with something in-between–not all cable, not all Internet. We’ll go back to the “cord,” even if it’s not a cord, but a subscription model.

Q: How important to your business is Net Neutrality as you look at audiences shifting to watching online? Altschuler: Something like Net Neutrality would be fantastic. It’s very important for a developing country like Mexico. Patel: Ditto.

Q (from the audience): What are the ad possibilities for Connected TVs? Goldman: Connected TV is one of those promises that never seems to kick in. Patel: No one really knows what the ad format will be on these Connected TVs. Agencies want to know millions of people will see exactly the same thing.

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