Friday, April 8, 2011

Final thought this week: ESPN app is tip of the iceberg

Or maybe it's not. But it is the issue of the moment for television providers, one that has been created by the creation of the iPhone and the iPad (and now Android phones, as well): who will be the ones allowed to create live programming apps, the program producers, or the content distributors?
With the launch of their iPhone app, WatchESPN, the Bristol, Connecticut sports network is now in the business of both content creation and distribution -- kind of, because the app will only work if you receive your television through Bright House Networks, Time Warner Cable or Verizon FiOS TV.

Meanwhile, Time Warner Cable and other television carriers are launching their own apps, generally iPad apps, but are getting plenty of push back from the networks, especially the major networks.

The reason is simple: the networks see that smartphones and tablets are another way to distribute their programming. With cable/satellite distribution you can negotiate a deal and try and cover the country, letting over the air handle the rest.

Imagine, for a second, that Americans decided that they wanted to watch their television programs inside movie theaters (crazy, I know). Who would the programmers negotiate with? The theatre chains, right? Well, I would imagine that the cable companies would argue that since they offer cable in the areas where the theaters reside that they have the right to deliver the content in that location. The argument is over whether the contracts involve only delivering programming to the television device, or the viewers location.

If device, then the programmers can negotiate new deals for new providers per device platform, or create their own apps. If location, then the cable companies are the ones who have that right.

It is a battle for the future of a new kind of programming distribution. The good news for consumers appears to be that everyone now (finally) realizes that consumers want their content everywhere (why are so many publishing executives so behind on this?). It is just a matter of letting the lawyers work things out (or the courts).

(Interestingly, the ESPN app skirted this debate by negotiating up front with the cable providers. In this regard, ESPN is siding with the providers, something the other networks disagree with.)