Some Industry Vendors Betting Big On TV Everywhere, Most Will Lose

As many readers already know, I'm not a big supporter of the notion that TV Everywhere is going to do much to change our industry. Some vendors in the online video industry disagree with me and want to tell me how TV Everywhere is going to change their business, providing the catalyst for them to really grow their revenue.

While that sounds nice, for the vast majority of vendors, it's a pipe dream. None of these vendors I speak to seem to be able to tell me what the size of the market could be, how many MSOs would want to offer a TV Everywhere type service or how they actually make any money. I get the sense that many in the industry now think they have to use the phrase TV Everywhere to sound cool or to make it sound like they "get it", even though no one seems to be talking about the business side of the offering. (Definition of MSO: Multiple System Operator. It's the industry term for cable company.)

But the biggest problem with some vendors theory, with regards to the impact it could have on their business, is the fact that there aren't enough large MSOs to make an entire business out of TV Everywhere services. As of June 2009, numbers put out by SNL Kagan show that the top 25 MSOs in the U.S. have a combined total of 59,947,100 subscribers. Of that number, the top three MSOs combined, Comcast, Time Warner and Cox, make up 70% of all cable subscribers. Seventeen of the top 25 MSOs have less than 1M subscribers each.

Looking at those numbers, it's clear that very few MSOs are going to be in a position to offer TV Everywhere services. There is no incentive for a MSO with 300,000 subscribers to bring to the market any type of TV Everywhere offering. That being the case, it means the total number of MSOs that any one vendor could even try and sell their service to is probably five or six. That's not a large enough market for any vendor to bet their business on or expect to see big revenue growth from. Some vendors will do just fine selling into those five or six companies with the correct expectations that it's just another one of many verticals they focus on.

But for the vendors who talk about TV Everywhere as being the catalyst for taking their business to the next level, or enabling them to drastically grow their revenue, it's just not going to happen. When I tell this to vendors, some of them want to really argue the point, but so far, not a single one can explain to me why they think otherwise. It's easy to say something will have a major impact, but it's another thing to show, with data, or some kind of evidence how that's actually going to take place. If any vendor feels they have that, I'd love to see it. I've asked many vendors for it and so far, none of them have produced anything other than to tell me, in marketing terms, why TV Everywhere is such a big deal to their company. The comments section is open.

Related Posts:

The Promise Of TV Everywhere Is Doomed For Failure, Here's Why

TV Everywhere Offerings Will Struggle To Be Successful

Cable Companies Hyping Over-The-Top Video, But Where's The Business Model?

  • I can’t wait to see what will happen to the gazillions of startups with technology that enables “tv everywhere”…
    The numbers alone don’t spell doom- media saturation is arriving very quickly… How many game consoles, computers, phones, and other gadgets can a consumer continue to afford and consume daily? There has to be a limit.

  • and yet it’s refreshing to see our industry finally realizing that pay models are truly the only future for content. I think TV Everywhere will just raise the visibility of the value of content which is good for all of us.

  • AnotherGuy

    From what I can tell thePlatform is most suited to win on this model. They are owned by the worlds largest MSO giving them unique access to requirements, knowledge and cash. Their product handles complex distribution requirements and business rules for managing output. Frankly, how companies like Extend & Digital Smiths plan to scale on this model is suspect.

  • Mike Berkley

    Hi Dan,
    I think you’re correct, IF you limit the potential market created by TV Everywhere to just MSO’s. I believe there is a huge new market that will be opened up by TV Everywhere: web site publishers.
    The promise of TV Everywhere Authentication is that premium video content can be made available on virtually ANY web site, as long as the user authenticates himself as an MSO subscriber. Suddenly any niche web site could present TV content related to their site, on their site.
    If that vision comes to pass, there could be lots of potential services these “2nd tier” publishers will need to make the most of the opportunity.
    You are right that the MSO market will continue to be highly concentrated… but I believe it does open up the distributor market, in a big way.
    See the graphic in this post:

  • Gang,
    It’s interesting how everyone seems to be caught up on the authentication piece of TV Anywhere. It’s a no-brainer. Authentication is a process that has been managed by our industry for many many many years. It’s not a complex issue at all. What’s complex is how the only components of our industry that intend to go after TV anywhere are the OVPs. The Platform and Extend Media and Ooyala and several others are going after this business. The CDN’s themselves cannot go after it alone because they don’t do DRM or CMS or user management. That’s the gap in the chasm.

  • Adam

    If I understand correctly, TV Everywhere will only be for cable subscribers. So if you’re paying for TV and can watch it in your house, this will let you watch it somewhere else.
    It’s not like the selling point of hulu is that I can watch it anywhere. That’s a nice plus, but not the cherry on top. The reason I watch hulu is because I don’t have to pay for cable. The only other place where I would be able to watch TV is at work, which I don’t do – so I’m not sure what the sales pitch will be.
    I can’t wait for TV Everywhere. I’ll just get my dad’s account info and then I’ll be able to watch even more fine programming at no cost to me. Good idea, Cable Providers!