Content for cord cutters is going to get harder to find, industry executive predicts

While millions of cord cutters are eagerly awaiting their chance to subscribe to HBOGo, the CEO of the company that helps ensure that HBO’s over the top content looks good is skeptical about when that might happen. Darren Feher, the CEO of Conviva, thinks things will get worse for cord cutters before they get better.
Instead of watching Game of Thrones via an a la carte HBOGo subscription, they’ll face higher fees for content aggregators like Netflix and Hulu and will find more content inaccessible unless they have a pay TV subscription, he thinks. Even Hulu’s backers have toyed with making the site accessible only to those who have a pay TV subscription.
“The whole industry is doing a lot of experimentation in places and markets where they are trying to figure out what will work for the U.S. market,” said Feher, who prior to the top job at Conviva was the CTO of NBC-Universal responsible for activities such as streaming the Beijing Olympics. “But before that, in the next 12 months there will increasing pressure against cord cutters. The whole authentication thing, where you can’t watch content unless you have a cable sub, will be a mess for consumers.”
In short, while Nordic viewers get their HBOGo a la carte, those of us in the U.S. may have to wait, no matter how many webcomics and industry insiders demand it. Even vague suggestions from HBO executives are compromises that limit the experience to an app.
However, there’s a light at the end of the tunnel, according to Feher. “Inevitability consumers will tell content creators what they want and the content guys will have to respond. There’s a whole upcoming generation of ‘cord nevers’ that the industry has to consider.”
For example, he notes that while many in the industry expected online viewership of the Super Bowl to be lower that it was, given that it was a weekend and people tend to have parties where they cluster around the big screen TV to watch it. He and others were surprised at how many online watchers there were and how many came from sites with an .edu address.
“No one brings a TV to college anymore, and so it’s logical to ask if they will ever want to watch outside of this way they’ve gotten used to,” said Feher. “But in the short term there will be a lot more pressure on aggregators like Netflix and Hulu, and the consumer will feel that in less content or higher prices.”
The challenge for the industry is complex, and is one where technology is pressuring business models designed for the old way of delivering television — multicast from one to many over a guaranteed and pay-TV-provider-controlled connection. The internet has made viewing content more of a one-to-one proposition and the rise in over the top services and multiple devices on which to watch the content has made the entire experience disjointed.
Conviva has stepped in to ensure video quality in this brave new world with software that parses a lot of data in the cloud and has software agents that make decisions about how to adapt the video in response to problems. If the internet is congested for example, it may route content via a different route. If the video is buffering in your home because your Wi-Fi is wonky it may drop down to a lower bit rate.
But outside of technical solutions, Feher also thinks there’s a business model that will help content companies and broadcasters make money so they can avoid “trading analog dollars for digital pennies,” as NBC-Universal’s Jeff Zucker (and Feher’s former boss) has said. It may be a matter of charging people more money for HD streams or even more for 4K streams that require a whopping 25 Mbps connection. ISPs are trying to build this level of granularity into their billing systems and networks.
It might also be as simple as using the targeting abilities available in the digital world to better monetize a viewer by showing him or her more relevant advertising or charging different prices for a la carte content. Essentially he’s proposing that the data driven model we’re seeing drive success in other industries takes a stab at changing television. I hope the results are worth watching.