TV op­er­a­tors seek sil­ver bul­let to fight on­line ri­vals

Firms want Net­flix to share data with them

Kuwait Times - - TECHNOLOGY -

SAN FRAN­CISCO: The em­pire has not yet fig­ured out how to strike back. The ma­jor legacy tele­vi­sion com­pa­nies are strug­gling to find the for­mula to stem the loss of cus­tomers to In­ter­net ri­vals like Net­flix, Ama­zon and oth­ers.

Time Warner-one of the main­stays of the industry with its chan­nels in­clud­ing TNT, Cartoon Net­work, WB and HBO-has seen its stock come un­der heavy pres­sure since low­er­ing its out­look in its last quar­terly up­date.

While Time Warner is still a ma­jor industry force, the loss of view­ers trans­lates to lower ad­ver­tis­ing rev­enues, rais­ing the prospect of a down­ward spiral.

“Sim­i­lar to the rest of the industry, rat­ings at our key do­mes­tic en­ter­tain­ment net­works have de­clined to a greater de­gree than we an­tic­i­pated a year ago and that will neg­a­tively af­fect ad rev­enue next year,” said chief financial of­fi­cer Howard Averill.

“We are as­sum­ing de­clines con­tinue at a sim­i­lar rate in 2016.” Else­where in the industry, 21st Cen­tury Fox re­ported lack­lus­ter re­sults dragged down by its box of­fice per­for­mance while CBS re­ported a rise in ad­ver­tis­ing rev­enues.

Walt Dis­ney Co-which owns key tele­vi­sion as­sets in­clud­ing ABC and ESPN-re­ported strong earn­ings in­clud­ing a record an­nual profit, but some ob­servers re­main skep­ti­cal whether the industry “di­nosaurs” can stem the on­line jug­ger­naut led by Net­flix.

Net­flix, friend or foe?

The tra­di­tional tele­vi­sion firms, while work­ing with Net­flix, are de­bat­ing whether to treat the stream­ing gi­ant as a friend or foe. While th­ese firms may sell con­tent to Net­flix, they also are try­ing the Net­flix for­mula of stand­alone on­line sub­scrip­tions for ser­vices such as HBO Now and CBS All Ac­cess.

“We’re see­ing more com­pa­nies start­ing to tell Net­flix ‘We’re not go­ing to sell you our con­tent or as much of it any­more, or at least not at the same price that we were,’” said James McQuivey, an­a­lyst at For­rester Re­search.

“They want to un­der­mine Net­flix at this stage be­cause they de­cided that Net­flix is too pow­er­ful. And partly it’s a ne­go­ti­at­ing tac­tic, be­cause there are things they want from Net­flix that Net­flix isn’t giv­ing them. They want it to pay more money for their shows, they also want Net­flix to share data with them.”

CBS is tak­ing a new ap­proach by launch­ing its up­dated “Star Trek” se­ries on its on­line ser­vice. McQuivey calls this “a re­ally smart idea,” adding that “CBS knows there are mil­lions of Star Trek fans” who will pay for it. “This is the right kind of au­di­ence to try it, and it is the right time,” he said.

McQuivey said the ma­jor TV com­pa­nies “have been in ex­per­i­men­ta­tion mode” with dig­i­tal but now need to step up those ef­forts. “The ex­per­i­men­ta­tion has taught them that they can make some money in dig­i­tal, but now it’s time to op­ti­mize the money they make,”he said.

Stream­ing ser­vices like Net­flix, Hulu, Ama­zon and oth­ers mean­while are cre­at­ing orig­i­nal pro­gram­ming, adding to the ten­sions be­tween old and new me­dia groups.

Some ex­ec­u­tives like Dis­cov­ery’s CEO David Zaslav ar­gue that stream­ing ser­vices are eat­ing the lunch of tra­di­tional TV firms and ques­tion the model of hand­ing over too much con­tent at too low a price.

Com­cast’s NBCUniver­sal, one of the other ma­jor TV op­er­a­tors, is fight­ing back with its own stream­ing ser­vice called Seeso, of­fer­ing orig­i­nal com­edy pro­grams. NBCU’s Evan Shapiro said big ser­vices like Net­flix can con­found view­ers with too many choices.

“By fo­cus­ing on a spe­cific, yet large niche, and pro­vid­ing a cu­rated ex­pe­ri­ence, we can help view­ers find good stuff they might not or can­not find,”he said.

Hold­ing back con­tent

Time Warner chair­man and chief ex­ec­u­tive Jeff Bewkes said this week the com­pany is con­sid­er­ing hold­ing back some of its pro­grams from stream­ing op­er­a­tors for a longer pe­riod.

“We are eval­u­at­ing whether to re­tain our rights for a longer time and forego or de­lay cer­tain con­tent li­cens­ing,”he said. Its HBO unit al­ready has a three-year wait be­fore it al­lows pro­grams to be shown on Ama­zon Prime in the United States.

Dis­ney chair­man and CEO Bob Iger also spoke of re-eval­u­at­ing the re­la­tion­ship with stream­ing firms. “When we made th­ese de­ci­sions to sell th­ese shows to Net­flix, those de­ci­sions made the most sense for us in terms of the eco­nom­ics,”he said.

“Longer-term, it’s pos­si­ble that we’ll make dif­fer­ent de­ci­sions based on other fac­tors.” Ex­ec­u­tives are also be­ing forced to ac­knowl­edge that con­sumers are grav­i­tat­ing to on­line ser­vices be­cause they of­fer con­ve­nient on-de­mand view­ing, of­ten with lit­tle or no ad­ver­tis­ing. Iger noted that “con­sumers are de­mand­ing a bet­ter user ex­pe­ri­ence, and they are mi­grat­ing to plat­forms and ser­vices that de­liver it.”The Dis­ney chief said that “con­sumers now dic­tate where they want to ac­cess me­dia, and it is es­sen­tial for legacy dis­trib­u­tors to crack the mobile code.”

Bewkes said that“in our ef­forts to im­prove the con­sumer ex­pe­ri­ence on our net­works, we are also look­ing for op­por­tu­ni­ties to re­duce our ad loads.”— AFP

TOKYO: Toy­ota Mo­tor Corp.’s Ex­ec­u­tive Tech­ni­cal Ad­vi­sor Gill Pratt, left, and Pres­i­dent Akio Toy­oda, right, shake hands dur­ing a press con­fer­ence on ar­ti­fi­cial in­tel­li­gence in Tokyo. Toy­ota is in­vest­ing $1 bil­lion in a re­search com­pany it’s set­ting up in Sil­i­con Val­ley to de­velop ar­ti­fi­cial in­tel­li­gence and ro­bot­ics, un­der­lin­ing the Ja­panese au­tomaker’s de­ter­mi­na­tion to lead in fu­tur­is­tic cars that drive them­selves and ap­ply the tech­nol­ogy to other ar­eas of daily life. — AP

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