FCC proposal would widen opening for mobile video services, advertising
In a reflection of how mobile is disrupting the way that television and cable shows are distributed and consumed, the Federal Communications Commission is considering giving Internet-based video distributors wider access to programming.
FCC chairman Tom Wheeler, in comments posted on the agency?s blog this year, asked the commission to update rules governing who can distribute video content so that it is technology neutral, giving distributors who use the Internet the same access to programming owned by cable operators and the same ability to negotiate to carry broadcast TV stations. To date, scheduled programming has mostly been offered by over-the-air broadcasting, cable and satellite TV, but the proposal, if enacted, would open up opportunities for companies such as AT&T, Verizon, Sony and others to offer their own scheduled TV programing services on mobile.
?This regulation could be a part of the dismantling of the one-size fits all Pay TV bundle,? said Sam Rosen, Scottsdale, AZ-based practice director for OTT and multiscreen video at ABI Research. ?This series of changes in the practices of existing Pay TV companies coupled with the collection of new business models and services around video significantly helps Verizon and AT&T, who have video services as well as a national mobile footprint, and could open up easier go-to-market strategies for Sprint and T-Mobile.
?Mobile and OTT services could better compete against cable with more favorable rulings,? he said.
?In addition, companies struggling to piece together a virtual MVPD offering (such as Dish, Sony, Verizon, etc) would be able to blend full VOD libraries from one or two key programming partners while offering basic services from others using a compulsory license.?
Video consumption evolves
There has been significant growth in video consumption on mobile, much of it from on-demand services.
However, as it becomes apparent just how big a role mobile is likely to play in consumers? video consumption going forward, a move to offer scheduled programming via the Internet, and often accessible on mobile, has started to emerge.
For example, CBS recently announced a streaming service that includes linear, or scheduled, channels. Additionally, HBO will launch a new version of its Internet streaming service next year that does not require a cable subscription and could also include scheduled programming.
Dish is reportedly planning to launch an online service that may include smaller programming bundles while Sony, DirecTV and Verizon are also all supposed to be interested in similar services.
In the proposal were enacted, there would likely be a number of other companies introducing their own over-the-top video services, with a variety of niche packages designed for consumers? varying tastes.
Mobile video advertising
Mobile video advertising is also on the rise and the FCC?s proposal could help drive even greater opportunities here, including helping brands reach targeted consumer groups based on their programming preferences.
?The mobile video advertising market, especially for premium video content, is an explosive market that is extending the TV advertising market with better targeting, tracking, and call-to-action capabilities,? Mr. Rosen said.
?With these changes, some of the inventory will be locked up by national networks, but niche distributors could provide unique advertising products tied into content,? he said.
The FCC?s Mr. Wheeler said the proposal addresses growing consumer frustration with cable subscriptions that force them to buy channels they never watch. This frustration is causing growing numbers of consumers to cancel their cable subscriptions.
A more competitive Internet-based video marketplace could help address this frustration, if Internet video services have access to the same programming.
?We have passed from an era where it was necessary to build a purpose-specific pathway to deliver video,? Mr. Wheeler said in the blog post. ?The innovation of Internet Protocol (IP) has freed video from these closed pathways and single-purpose devices.
?The proposal put forth today will update FCC rules to recognize this new reality and, as a result, expand competition and consumer choice,? he said.
What is not clear is how the proposal, which appears focused on linear programming, would impact on-demand videos services such as Netflix.
It is also not clear if the FCC will follow the example of Europe, where 24-hour free-to-air windows are becoming more accepted.
If the FCC does not address the growing practices of digital video recording and on-demand streaming, it could limit the impact of the rules on mobile.
?We believe the FCC will tweak the rules for the MVPD to apply regardless of technology (cable, satellite, IPTV, OTT) which would give online distributors access to linear content at set license fees,? Mr. Rosen said. ?This makes obtaining a license fee for broadcast content easier.
?However, unless the FCC regulates around Cloud DVR implementations and storage, it will likely only help consumers access live broadcast sporting content away from their TV screens via some ad-supported, pay per time, and subscription services,? he said.
Chantal Tode is senior editor on Mobile Marketer