DirecTV launches its Latino streaming service Yaveo

DirecTV soft-launched its Latino streaming service Yaveo Monday, offering three live TV feeds channels as well some 2700 hours of on-demand content for $7.99 per month. Yaveo operates completely separate from DirecTV, meaning that subscribers won’t have to have an existing satellite TV subscription to access any of the content.

Yaveo’s live line-up comes from Hola TV, BeIn Sports and Cine Sony Television, and the service’s on-demand content is being supplied by Univision, MTV, Cine Sony Television, Caracol, TMN, Nick en Español, Canal Once and others. Gigaom readers will recognize many of those names: I’ve been following Yaveo closely over the last couple of months, revealing both its name and key details of its programming-line up before it was officially announced.

Most of the programming is Spanish-language content at this time, but the service itself is in Spanish and English, and Yaveo’s help pages promise English-language subtitles to be added at some point in the future. The service is currently available on the web as well as on Android, but DirecTV promises to bring it to iOS as well as connected TV platforms like the Xbox, Chromecast and Roku soon.

Yaveo has internally been known as HOTT, which stands for Hispanic OTT. Here's the internal placeholder logo of the service.

Yaveo has internally been known as HOTT, which stands for Hispanic OTT. Here’s the internal placeholder logo of the service.

DirecTV has been working on Yaveo internally for at least a year; the service is internally known as HOTT, or “Hispanic OTT.” For the satellite TV service operator, Yaveo is a first of what could eventually become a whole bouquet of online streaming services focused on niche audiences, something the company’s chief revenue officer Paul Guyardo alluded to in Yaveo’s launch press release, which quoted him saying:

“Yaveo gets DIRECTV into the OTT business and we’re excited to start with a compelling Spanish-language service targeted to the Hispanic community We’ll learn a great deal, use the findings to grow and improve the Yaveo platform and expand our OTT offering over time.”

This focus on the niche bodes well for DirecTV’s proposed merger with AT&T, which itself is targeting the niche for its online TV plans. AT&T and the Chernin Group have jointly earmarked $500 million for Otter Media, the niche-focused online video joint-venture that now owns the majority of both Fullscreen and Crunchyroll.

Why CBS went dark on Dish: it’s all about the internet

After weeks of threats, CBS followed through late Friday afternoon and took its stations off Dish Network. Dish subscribers in 14 markets around the country, including San Francisco, Los Angeles and New York, won’t be able to watch any more CBS programming until the two companies reach an agreement on a new contract.

The blackout not only cuts off popular [company]CBS[/company] shows like NCIS and the Big Bang Theory, but also the network’s sports coverage, including NFL and SEC football games. In some markets, viewers are also losing access to the CW network as well as Showtime.

A CBS spokesperson confirmed the blackout, sending out a statement that reads in part:

“What CBS seeks is appropriate compensation for the most-watched television network with the most popular content in the world, as well as terms that reflect the developing digital marketplace. We hope that we can reach an agreement very soon so we can all get back to the business of providing the best entertainment, news and sports to the Dish customers we both serve.”

Dish responded with a statement of its own:

“We are disappointed that CBS has chosen to black out their local channels, but remain optimistic that the channels will return quickly as both sides are continuing to work tonight to finalize an agreement.”

The move comes after months of contractual back-and-forth that largely mirrors the many retransmission and carriage fee fights we have seen in the past. On the surface, these fights always follow a very simple script: Broadcast and cable networks want more money in exchange for their programming, and pay TV operators aren’t willing to pay up. Both sides often try to enlist the public with on-air and online campaigns. Increasingly, the back-and-forth leads to blackouts, which inevitably result in the TV service operator giving in and agreeing to pay more.

But the dispute between CBS and [company]Dish[/company] is also a good example for why this isn’t just about corporate haggling. At the core, this dispute is all about the internet.

Dish wants more rights, CBS more dough

That’s in part because Dish doesn’t just want CBS to renew its contract for a few more years. The satellite TV operator also wants rights to carry CBS on its Nutv online TV service, which Dish intends to launch before the end of the year. Dish already has announced deals with Disney/ABC, Scripps and A&E networks, and it is likely going to get access to NBC’s programming thanks to the Comcast merger conditions.

Dish has said that it wants to target cord cutters with its online service, and the company is looking to compile an affordable bundle of live and on-demand programming for $30 to $40 per month. Dish was able to strike its Disney deal in part because it used its Hopper DVR as a bargaining chip, promising to curtail ad skipping and monetize recorded shows in exchange for access to online rights.

But it looks like CBS may not be playing ball. The broadcaster recently launched its own online video service called CBS All Access, which combines a live feed of its network with access to on-demand programming. CBS is charging All Access subscribers $5.99 a month. The network was getting just $0.54 per subscriber on average from TV service providers when it signed its last deal with Dish in early 2012, according to Reuters, and has reportedly been looking to bump this to $2 per subscriber in recent contract negotiations.

Advertisers and audiences are moving online

These significant price increases also have something to do with the internet, albeit on a different level. TV networks have been asking for more money for their channels partly because their other major revenue stream is starting to slow down. Advertisers have for some time been wary of TV viewers skipping over their ads with DVRs as well as moving away from traditional TV to new online services. Now, we are starting to see some of them shift their money away from TV and towards the internet as well.

This trend has become especially obvious this year, with companies like Time Warner and Comcast reporting ad revenue for their networks being flat, or in some cases even declining over the most recent quarter, according to a recent Wall Street Journal report. And big advertisers are getting more vocal about shifting priorities. Allstate, for example, plans to move 20 percent of its ad dollars from TV to the internet by 2015, which Journal cited as part of mounting evidence for a “structural slowdown.”

The irony is that advertisers don’t make these decisions in a vacuum; they’re just following their audience.

While internet usage, and even online video viewing, was long seen as complementary to traditional TV consumption, there are now signs that the time spent watching traditional TV is actually declining. Recent numbers from Nielsen show that Americans on average watched seven hours less traditional TV per month during the most recent quarter than a year ago.

So why would networks want more money for programming that is attracting fewer eyeballs, you might ask? One simple answer is: because they can – for now, anyway. Networks aren’t oblivious to the changing world around them, and they are trying to maximize their value while they’re the strongest. That means that we are likely going to see a lot more blackouts like these ones ahead.

For that, you can blame the internet. Or, you know, just go and watch something online.

This post was updated at 4:40pm with a statement from CBS, and at 7:15pm with a statement from Dish.

AT&T wants to buy DirecTV for $50 billion

AT&T (S ATT) is in advanced talks to buy DirecTV (S DTV) for $50 billion, or about $100 per share, Bloomberg reported Monday. AT&T’s plan is to turn the satellite company into an AT&T unit, and keep management on board to run that unit, with plans for DirecTV’s chief executive Mike White to retire in 2016. The acquisition report, which neither company is commenting on, comes after three months after Comcast announced that it was going to acquire Time Warner Cable in a $45 billion deal.

DirecTV next in line to get internet TV rights from Disney

Looks like Dish’s (S DISH) internet TV deal with Disney (S DIS) may open the floodgates for news about similar arrangements: Reuters is reporting that DirecTV is in negotiations with Disney about also launching an internet-based TV service with programming from ABC and ESPN. DirecTV’s retransmission agreement with Disney is up soon, so the timing couldn’t be better.

Pay TV stops growing: Top 4 services all lost video users in Q2

With satellite carrier DirecTV reporting its first-ever net quarterly loss of subscribers, the Big Four pay TV services collectively lost 407,000 U.S. video customers in Q2. This was not offset by gains of 322,000 net video users reported by telco services AT&T U-Verse and Verizon FiOS.