Cable Content Companies Split on Digital Distribution
At the National Cable Show in Washington, DC this week, the cable content giants are embracing the idea of "TV everywhere" — giving people who pay for cable TV, access to more content, on-demand.
The idea is that the more added-value consumers get, the more they'll think it's worth paying those bills. It's clear that consumers are spending more time streaming content on their mobile devices-- and want more flexibility.
The question is how cable content companies want to handle their digital distribution strategy.
Discovery Communications' David Zaslav says "we have to follow consumers."
Though there's no doubt that the company's core business is cable, with 14 channels in the U.S. and a growing international business, Discovery is increasingly interested in reaching digital consumers-- beyond offering traditional "TV everywhere" access to his channels from say a Time Warner Cable TV app, or Comcast's Xfinity app.
Zaslav says Discovery acquired Silicon Valley digital video company Revision 3 because he and his team were "super impressed" with the company's 150 million monthly streams and their short form content.
Nine months after buying the company the number of monthly streams has doubled to 300 million. With this new digital expertise, Discovery last month launched a new digital-only channel targeting the young male audience, which is hard for TV advertisers to reach.
"We have almost 50 channels on YouTube," Zaslav says. "We're playing very aggressively in the traditional cable space, but anywhere consumers are consuming content, we want to play. We're not making money in that space yet but we have the leading streaming video business in the US, and I think for us in terms of where the world goes, it's important for us to stay contemporary."
Disney's ESPN is taking a very different route—it's not giving anything away for free, but rather stepping up the amount and variety of mobile content—even live NFL games—it offers to its subscribers.
"Our intention is always to make it as easy and convenient for all our consumers to consume all our content across all platforms any time," ESPN President John Skipper said.
Now that means ESPN is looking at all the ways to offer its subscribers more value. "We have explored whether our helping to subsidize wireless useage would be helpful" to allow consumers to access more mobile video."
—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin