Ice dam breaks: AOL, Amazon, Dish, AT&T, TWC spill into online video
I had a whole other column lined up today around Aereo and its first day at the Supreme Court, but then things started going off on the online video front like popcorn in an air popper. Time Warner Cable (NYSE: TWC) started things percolating Tuesday, announcing a partnership with Fanhattan to make live and video on demand TV available via the $99 Fan TV box in several regions. And AT&T (NYSE: T) got people talking by announcing a partnership with The Chernin Group--and a $500 million investment sweetener--to explore its online video options.
A day later, Dish Network (NASDAQ: DISH) set things off with an announcement that it would start an Internet TV service this summer. Then AOL announced a pact with Miramax to stream its movies for free. And Amazon (NASDAQ: AMZN) scored a coup by inking an exclusive content agreement with HBO, unlocking much of its older original series library to non-HBO subscribers for the very first time.
For a once-a-week publication, FierceOnlineVideo has had an embarrassment of riches this week in terms of reporting.
The question is, why are so many announcements being made seemingly all of a sudden? It's as if an ice dam broke over the last 48 hours, sending a wave through the entire industry. Like that metaphorical natural event, we don't always know what the trigger is, but we did know it was going to happen, and soon.
It's not really a surprise, though. All these strategic moves are a result of ideas and technology gains building up in the background for quite a few years.
The reason it's happening so fast is debatable. Multichannel video programming distributors (MVPDs) have had the opportunity to jump more fully into the space for quite some time now. But their moves were mostly tepid, offering viewers enhanced experiences on their second-screen devices (e.g., tweeting about live shows happening on their TV screens) and only recently embraced online video as an alternative to the big glowing box in the living room.
A March blog post by MoffetNathanson (sub. req.) noted that "the window may be closing for the cable industry to move towards usage based pricing to inoculate itself from the potential harm of a competing video service riding over its broadband infrastructure." In an email sent to media today, the research firm said that it was surprised by how the industry "seemed unconcerned" by Dish's deal with Disney in March and the threat that it posed to both cable providers and rival DirecTV.
I don't think the cable industry is unconcerned with these announcements. TWC wouldn't have worked out a deal with Fan TV if it wasn't looking for a way into the space. AT&T wouldn't be putting $500 million on the table to invest in OTT plays if it wasn't trying to find a way to diversify its expansive fiber network beyond its role as a backhaul provider and U-verse service conduit.
For years, MVPDs have been eyeing the growing online video space. What's been holding them back is profitability. With this week's announcements, it appears that, at least for a few, it's more important to be the early entrant and hunt for that profit than wait and watch that window of opportunity close. -- Sam