The Future of Television
People. Knowledge. Power. Last month I learned firsthand how NAMIC puts its slogan into action at my first NAMIC event, “The Future of Television.” I eagerly arrived to find the room jam packed with Comcasters. I was greeted by a smiling Yasmine Ndassa, President of the Philadelphia NAMIC Chapter. “I’m so excited! Let me introduce you to Laura,” she said as she led me to a table at the front of the room. We waited a few moments as Laura Martin, the event speaker, finished a conversation with two other attendees who were leaning forward, clearly engaged in the conversation.
To say the least, Laura Martin has had a very impressive 25-year career. She holds a Harvard MBA and CFA designation, worked as a media analyst for Capital Research & Management and Credit Suisse First Boston, and was EVP of Financial Strategy and Investor Relations for Vivendi Universal. Currently she is Senior Analyst in Entertainment, Cable & Media at Needham Equity Research investment banking and asset management firm. As a Wall Street analyst, she publishes internet and media research, which she uses to provide informative industry analyses to money managers.
After a friendly introduction, I took my seat. I knew whatever she had in store for us that evening was going to be good. “I’m paid to have a point of view,” she began. And that night she shared many viewpoints on a range of timely topics across the competitive TV, online, and mobile landscapes. Here are some highlights:
The OTT model is being put to the test. Recently WWE severed ties with its MVPD partners and launched an over-the-top subscription service. She explained that Vince McMahon, Chairman and CEO of WWE, is trying to acquire 1 million subs by the end of 2014 in order to be financially indifferent from all PPV revenue he lost from the MVPDs. Vince owns all of his content, which directly competes with the larger TV ecosystem. If the OTT strategy works, will other networks follow suit? Time will tell.
Online video demand is limited. While online views have increased year over year, the number of Americans tuning in has not. For online content producers and distributors, this is a fundamental problem caused by various factors: Online stickiness is poor since viewers have to take action to find or watch the next video rather than view passively as they do on linear TV; discovery of good content online is difficult; and content quality is uneven. There are just as many economic challenges: The online pay model does not require advertisers to pay upfront license fees; there are limited standardized measurements for ROI (aside from comScore, which has lost much of its credibility.) In addition, it is challenging for advertisers to purchase inventory because there are thousands of websites from which to choose. Consequently, some of the most popular online content creators and distributors have been forced to seek additional revenue streams.Hulu is trying to solve that by securing a second revenue stream from the cable industry; in exchange for a subscriber fee, MVPDs can distribute their VOD content to more households through Hulu’s user-friendly interface.
Wall Street values mobile first above any other platform, largely because video consumption on mobile devices has increased 25% year over year. With desktop usage down 6% year over year, “the fight among all networks and apps is for page 1 of your smart phone,” Laura explained. According to Wall Street, the best new revenue stream will be delivered through mobile.
My favorite part of the night was the Q&A, which quickly evolved into an intellectual debate among the attendees. The discussion hinged on one main question: How will Comcast compete long-term in a world where millennials rely on their parents’ subscriptions for services like HBO Go? Laura believes “as long as they’re hooked,” millennials will pay for cable in the long term. Others contended that Comcast’s new packages, like Internet Plus, will serve as sustainable extensions of the business.
I would like to extend a big thank you to Yasmine for inviting me to this event, and look forward to the next one.
Click here to view pictures from this event!