SAN ANTONIO—With a new focus on acquiring content that was previously relegated to pay TV services, social media and tech giants like Facebook, Amazon and Google are focusing more on disrupting traditional pay TV, director of USC’s Annenberg School of Media Innovation Lab and author Jonathan Taplin told an audience at the opening keynote of the NCTC Winter Educational Conference.
Taplin, whose book “Move Fast and Break Things”traced the monopolization of the internet by Google Facebook and Amazon, noted that while over the years those three companies focused on other business segments, they are increasingly honing in on the video business. Facebook’s $610 million bid for streaming rights to Indian Cricket matches—it lost out to Fox—is just one example of how serious the tech giants are becoming about video.
The largest corporations of the world—Google, Amazon and Facebook—are going to be the new gatekeepers, Taplin said.
In addition to Cricket rights, Facebook has tried to incorporate its GUI into set-top boxes as part of the Federal Communications Commission’s “Unlock the Box” initiative back in 2016, which has since fizzled in the new administration but could surface again. Taplin said giving Facebook access to set-tops cold decimate pay TV’s local ad business.
“They’ll keep trying that,” Taplin said. “So, you’ve got to be careful.”
Adding to the pressure is that the next generation of TV viewers have grown up with 100-Mbps broadband connections, creating their own media systems without cable.
“You have to be aware that this notion of cord-cutting is real,” Taplin said. “These companies are coming for your business.”
Taplin said operators can fight back in several ways, offering skinnier programming bundles in response to competition and reliable, high-speed data connections. He added that the traditional method of delivering and buying programming also will change in the future.
The current ecosystem where distributors are forced to buy large bundles of programming from content providers, even those shows that have little viewership, has to change, he added.
“A lot of those channels don’t pass the ‘who cares’ test,” Taplin said. "You have to stand up to the channels that nobody is watching.”
This story originally appeared on TVT's sister publication Multichannel News.