Michelle Clancy | 19-08-2013
Sony Corp is nearing a deal with at least one content owner about launching an over-the-top (OTT) Web TV service, according to reports. The news comes even as Intel, another new entrant to the services space, is gearing up for its own OTT effort, along with offerings by Google and Apple.
MTV parent Viacom Inc is the furthest along in talks with the Japanese consumer electronics giant, according to the Wall Street Journal (WSJ), with a preliminary arrangement inked. But Sony also has been in discussions with other programmers for several months, the paper said.
Sources told the LA Times that Sony is seeking a content licensing arrangement that mirrors that which content owners have with satellite and cable companies. Media companies typically licence their content in programming blocks that combine popular channels with niche channels in order to leverage audiences for the lesser-known networks. That's a structure that Intel has reportedly rejected, instead planning an STB-based service that would offer all the standard cable offerings but allow subscribers to pick and choose the networks they want to pay for, in an la carte format. Sony will stream cable nets over broadband connections to Sony-made devices like PlayStation gaming consoles, connected TV sets and Blu-ray players. It's a goal that will force Intel to pay a big premium for access to content, and it's unclear if the resulting subscription pricing would make for a viable business model.
Sony and Intel are also not alone in questing after online TV revenue. Apple is said to be developing a premium TV offering that gives consumers the ability to pay a subscription in order to skip over ads; Apple would then compensate TV networks and cable/IPTV/satellite for the lost revenue. Rumours of an Apple HDTV and STB combo continue to persist as well.
And Google, the WSJ previously reported, wants to replicate a standard cable or satellite package to be delivered online and via mobile apps rather than via a standard set-top box. Sources told the WSJ that Google envisions users being able to flip through a programming guide and linear channels the same way that they do now, along with having access to on-demand content.
The efforts point to a healthy pro-consumer competitive environment shaping up, but the road will be a long one for any of these companies. The biggest issue is the fact that media companies are wary of alienating their incumbent pay-TV distribution partners, a fact that has traditionally pushed up the price tag for OTT companies seeking access to current, mainstream content. Most are instead interested in getting on board with TV everywhere with cable, IPTV and satellite partners, expanding on-demand availability of library content or using OTT providers to provide a home for niche programming. In fact, gaining the same 'live' or 'same day' release rights as traditional TV operators for basic cable-style content has largely been prohibitive for the online streaming set. In any event, the business is structured in such a way that new entrant companies looking to replicate a live programming package would need a subscription volume large enough to wrangle discounts from the content owners in order to be able to offer savings to customers vis vis a traditional cable package a tall order for any start-up service.