Turner CEO: TV Everywhere, OTT Video Not Mutually Exclusive

15 May, 2015 By: Erik Gruenwedel

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In the industry dash toward over-the-top video, TV Everywhere, pay-TV’s erstwhile antidote to subscription streaming, appears to be yesterday’s news.

But not to John Martin, CEO of Turner Broadcasting System, which operates CNN/U.S., CNN International, CNN.com, HLN, TBS, TNT, Turner Classic Movies, truTV, Cartoon Network, Adult Swim and Turner Sports.

Speaking May 14 at the MoffettNathanson Media & Communications Summit in New York, Martin said TV Everywhere, which enables multichannel video program distributors to offer on-demand access to subscribers, has been given additional lifelines such as broader set of rights, including access to more episodes from earlier in a show's run, to win over distributors and consumers. 

At the same time, OTT video services such as Netflix, Hulu Plus and Amazon Prime Instant Video have secured greater exclusive access to complete TV show seasons, in addition to growing portfolios of original content — a reality that could undermine the TV Everywhere's existence.

“I think we could do both [TV Everywhere and OTT video]. I don’t think they’re mutually exclusive. I think the two can be complementary,” Martin said.

Specifically, the CEO said the SVOD ecosystem has multiple facets to it, notably filling the space once occupied by TV syndication. At the same time, SVOD players are evolving into virtual TV networks — potential competition to pay-TV.

“We would love if the [pay-TV] distributors would make the necessary investments to make the TV Everywhere experience better. We want TV Everywhere usage to go up. That would be terrific,” Martin said.

With ownership of content important in an increasingly fragmented world of video distribution, Turner is working closely with sister company Warner Bros. to own more original content. The move helps monetize (via ads and subscription) users while building content assets that can be monetized globally.

The strategy is key as pay-TV operators lose multichannel subscribers — many to OTT video. Martin said the television industry has a storied history of new technology (satellite and telecom) usurping market share from existing broadcast channels.

“What we’ve been saying now for a long time is that the idea of the super bundle in the U.S. remaining intact for the foreseeable future is just not sustainable,” he said.

The executive said the overwhelming majority among so-called cord-cutters and cord-nevers would return to multichannel subscriptions if they see more value in the offering.

To have bundles that appeal more to what they want at lower price points could actually stabilize the pay-TV universe. He said services such as Sling TV and PlayStation Vue covet network channels, which is good for the industry. When factoring in live TV viewing with on-demand, overall viewership is actually slightly up.

“I think this is really good,” Martin said.

SVOD Parity

With Netflix on a march toward global access, concern about a monopoly resonates among media companies. To counter the surge, Turner inked a license deal with Hulu Plus.

The SVOD market could be highly additive to the TV ecosystem, provided there is competition among SVOD players. Indeed, Hulu was willing to give Turner an output deal while Netflix is moving away from general content deals, according to Martin.

“[Hulu] was the right partner for us at the right time. Hulu seems to be a much more committed buyer of high-quality products,” Martin said.

The executive said traditional pay-TV distributors can’t be upset about Turner licensing content to SVOD because vibrant competition among distributors lifts all boats. For example, Martin cited its agreement with OTT service Sling TV as a pact that also involved with a “very important” traditional distributor in Dish Network.

“We would love to work closer with our traditional partners and bundle them to reach a greater number of subscribers,” Martin said.

 

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