Online Video Fails to Disrupt the Cable Business Model

While online video is growing every day, the established cable business models are so far holding strong. Will cord cutting ever impact traditional pay TV companies? That was the topic of a recent Streaming Media East panel discussion.

Ad sales illustrate the disparity, with online video ad sales still nowhere near what television is generating.

"You can only sell what you have, and there's a ton more volume on TV," noted Jason Glickman, CEO and co-founder of Connected Sports Ventures. "There's the fact that there's more volume; there's also the fact that the sellout rate is not what it could or should be in online video yet. There's so much more consumption of TV content than there is of online video content now. I think that begins to change really quickly."

"There's also, by the way, the ad load is very different on television than it is online," interjected Mike Gordon, chief strategy officer of Frequency. TV can sell 12 ad avails per 30 minutes of programming, he noted, while online broadcasters might sell 15 seconds per clip.

The pay TV companies have been clever in anticipating the attacks from online video. They're offering premium content online in TV everywhere packages, for example.

"Revision 3 was bought by Discovery Communications a week or two ago, and you might think that that might have been an overreaction on behalf of Discovery, maybe an early defensive move realizing that if you're going to capture that lost generation you've got to get the world's leading lost generation video network, which is what Revision 3 claims to be," added Justin Fadgen senior vice president of publisher operations for Grab Media. The erosion of the current cable model will be slow, he said, with cable companies offering alternatives to defend their business model.

For the full discussion, watch the video below.

Will Internet TV Accelerate Online Video's Growth or Keep Television Stronger than Ever?

While cord cutting has yet to make any real impact on the cable TV business, in the future all devices will be connected and more content choices will be available. Traditional television still remains as strong as ever while online video has, in some ways, failed to disrupt the broadcast industry. In this session, content owners and CE manufactures will debate whether over-the-top (OTT) connected devices and platforms will accelerate the flow of consumers away from television and onto the web and outline what OTT services have the best shot at disrupting cable TV.

Moderator: Ashkan Karbasfrooshan, CEO, WatchMojo.com
Speaker: Justin Fadgen, SVP, Publisher Operations, Grab Media
Speaker: Jason Glickman, CEO, Co-founder, Connected Sports Ventures
Speaker: Mike Gordon, Chief Strategy Officer, Frequency