5/17/2011 6:00 AM
Two recent filings with the FCC provide a glimpse into the thinking of both MVPDs and content owners with regard to how viewers want to access programming. While it’s most common for cable and satellite providers to require a set-top-box (STB) to access programming, both FOX and Disney have filed Ex Parte letters with the FCC, which indicate other devices may be supported.
In a May 11 Ex Parte letter, FOX Group SVP for Content Protection, Ron Wheeler, noted that an unnamed MVPD has told FOX “that it intends in the near future to make its subscription and on-demand video services available directly to widely-marked consumer electronics devices, such as game consoles.” The MVPD asked FOX to include that permission in a new agreement.
The Disney company weighed in earlier this month in a meeting with FCC officials. In the company’s Ex Parte filing on May 5, Disney representatives noted that “the video marketplace is evolving so quickly that there is no need for further government intervention or standard-setting and that there is no need for the FCC to issue a Notice of Proposed Rulemaking in this [AllVid] proceeding.” Continuing, Disney said, “Indeed, as seen as far back as in January at the Consumer Electronic show ... the marketplace is already providing consumers with a myriad of ways to access content.”
Disney representatives argued that the FCC’s AllVid proposals would “hamper programmers’ ability to protect content, to innovate or experiment with new business models and to ensure that such programming is presented appropriately.”
What’s important is that these two filings show that content owners are seeking the ability, or being asked, to deliver content on a variety of platforms. And, at least one company, Disney, believes that the FCC would simply be getting in the way of new technology development by requiring AllVid.
According to Paul Erickson, senior analyst at IMS Research and author of the report "OTT Video – Hardware and Connectivity," “There are still considerable trade-offs in content availability when it comes to cutting the cord. People will continue to consume a mix of OTT and traditional pay TV for a while to come. Current-day claims that OTT video is a significant cord-cutting threat seem overstated and also fail to recognize that the pay-TV industry is already busy working on OTT delivery methods of their own.”
Erickson adds, “It is not unrealistic that in the future, pay-TV operators’ content can be sufficiently secured and delivered to general CE devices on an OTT basis, resulting in increased demand for these connected devices. Future demand for OTT hardware will eventually be driven by the combined appeal of both traditional and nontraditional pay-TV services.”
Even if game consoles and other consumer devices are enabled by some MSOs, for the near term, the majority of viewers likely will continue to depend on the tried-and-true STB for access to their cable and satellite content. Today’s STB provides the familiar interface and features that viewers understand.
Even so, as younger viewers enter the decision-making stage, they will increasingly be comfortable with new ways to access entertainment. And, as content owners and MSOs are now discovering, these viewers expect content for which they’ve already paid to be available on a variety of playback devices and in mobile environments.