Home theatre owners eye the future online Cable and satellite distributors and broadcasters dabble in online video, but unsure of business model.
Home theatre owners eye the future online Cable and satellite distributors and broadcasters dabble in online video, but unsure of business model. The CRTC, looking in particular at the rise of online and mobile video, found that while new media is growing in importance, “Internet and mobile services are acting in a complementary fashion to the traditional broadcasting system.” As CRTC chair Konrad von Finckenstein said in a statement, “Any intervention on our part would only get in the way of innovation.” For Canadian businesses trying to capture the online video market, however, regulatory issues may well be the easiest hurdle to clear. And yet few of the businesses with the most to gain and lose — broadcasters, cable and satellite companies — have figured out how to generate revenue online comparable to that from their core broadcasting business. Differing business models for online video “The business model for online TV is not really nailed down and the revenue outlook is not yet attractive [which is] paradoxical because internet — social media, online video — is increasingly becoming integrated into consumers’ lives,” said consumer technology analyst Kaan Yigit, president of Toronto-based Solutions Research Group. Cable companies like Time Warner in the United States and Rogers Communications in Canada have been pushing for a business model built around a cable online video portal, where a company’s cable subscribers can access broadcast content online, no matter who their internet provider is. Broadcast networks in the United States and Canada that own the rights to their shows and those they acquire from abroad have taken the online distribution model directly to their customers, through either their own websites — as is the case here in Canada with CTV, Global and CBC — or by teaming up with an online service like Hulu, a joint venture of NBC, Fox and ABC that is currently available only in the United States. Bell launched Bell TV Online in October last year as an early experiment in the portal idea Rogers has proposed, has the Bell Video Store, offering downloadable content like the iTunes store, and also offers some video through its Sympatico/MSN internet portal. Risk of cannibalizing cable, satellite Mark Tauschek, a senior research analyst with Info-Tech research group, said the general response here in Canada has been for cable, satellite and broadcasting companies to “dip their toes” in online video without committing to it completely. As ISPs they might want to encourage their customers to go online to watch video, but any movement towards online could potentially come at the expense of advanced broadcast distribution such as Personal Video Recorder (PVR) services or Video on Demand (VoD) that seek to offer the same anytime, anywhere aesthetic that has made watching videos on YouTube or downloading them from iTunes so popular. Given the success of VoD and other cable and satellite offerings, it is not surprising that one of the more tangible proposed online video business models hopes to build upon the cable business. During Rogers’ appearance before the CRTC new media hearings, the company unveiled plans for a Rogers Broadband Video Portal, which it sees as a way to reach an online audience without cannibalizing its cable audience, particularly subscribers to its on-demand service and specialty channels.