June 15, 2009

Report: Online Video Strains Old Relationships

According to new research from The Diffusion Group, cable networks are becoming much more active in regards to online video distribution strategies, even at the cost of straining relationships with their pay TV operator partners. This and other themes are discussed in TDG's latest digital media analysis, "Online Video Strategies for Content Providers - Reflections and Recommendations."

"Cable networks have libraries filled with high-demand video content, but in many cases the content can only be enjoyed via pay TV outlets such as cable, satellite, and telco TV operators. Such is the nature of the licensing agreements now in place," said Colin Dixon, senior partner and director of TDG's broadband media practice, in a statement. "It is important that, as these carriage agreements are renegotiated, content studios assert their right to establish a credible branded video presence in these emerging conduits, independent of traditional TV operators."

Dixon noted that, given the amount of money content networks generate from licensing content to pay TV operators, they have been reluctant to push too hard for risk of upsetting this long-standing and mutually beneficial relationship. However, new technologies and shifting consumer behavior are causing content purveyors to reevaluate the importance of these relationships. "If Disney can work with Hulu or even go direct via its own web properties, the value they attribute to a Comcast relationship is lessened. Now imagine how these relationships will be when broadband reaches the TV."