Some Industry Vendors Betting Big On TV Everywhere, Most Will Lose
As many readers already know, I'm not a big supporter of the notion that TV Everywhere is going to do much to change our industry. Some vendors in the online video industry disagree with me and want to tell me how TV Everywhere is going to change their business, providing the catalyst for them to really grow their revenue.
While that sounds nice, for the vast majority of vendors, it's a pipe dream. None of these vendors I speak to seem to be able to tell me what the size of the market could be, how many MSOs would want to offer a TV Everywhere type service or how they actually make any money. I get the sense that many in the industry now think they have to use the phrase TV Everywhere to sound cool or to make it sound like they "get it", even though no one seems to be talking about the business side of the offering. (Definition of MSO: Multiple System Operator. It's the industry term for cable company.)
But the biggest problem with some vendors theory, with regards to the impact it could have on their business, is the fact that there aren't enough large MSOs to make an entire business out of TV Everywhere services. As of June 2009, numbers put out by SNL Kagan show that the top 25 MSOs in the U.S. have a combined total of 59,947,100 subscribers. Of that number, the top three MSOs combined, Comcast, Time Warner and Cox, make up 70% of all cable subscribers. Seventeen of the top 25 MSOs have less than 1M subscribers each.
Looking at those numbers, it's clear that very few MSOs are going to be in a position to offer TV Everywhere services. There is no incentive for a MSO with 300,000 subscribers to bring to the market any type of TV Everywhere offering. That being the case, it means the total number of MSOs that any one vendor could even try and sell their service to is probably five or six. That's not a large enough market for any vendor to bet their business on or expect to see big revenue growth from. Some vendors will do just fine selling into those five or six companies with the correct expectations that it's just another one of many verticals they focus on.
But for the vendors who talk about TV Everywhere as being the catalyst for taking their business to the next level, or enabling them to drastically grow their revenue, it's just not going to happen. When I tell this to vendors, some of them want to really argue the point, but so far, not a single one can explain to me why they think otherwise. It's easy to say something will have a major impact, but it's another thing to show, with data, or some kind of evidence how that's actually going to take place. If any vendor feels they have that, I'd love to see it. I've asked many vendors for it and so far, none of them have produced anything other than to tell me, in marketing terms, why TV Everywhere is such a big deal to their company. The comments section is open.