Is it D2C, DTC, OTT, MCN or MVPP – Why is this important to “New TV”

There are predictions occurring in the media technology industry on what TV is and what it will be.

Well, here’s a news flash…it will be the same that it is to you right now, only there will be more of it and easier to obtain.

TV will be based around the ease of access on whatever devise you’d like to watch on, along with whatever the programming that you will want to watch: live sports, past sporting events, movies, television programming your country, you friends countries.

In fact, it will be a lot like your going to your local super market.

Keeping that metaphor in mind, TV’s distribution model of the future will be a lot like the supply chain that’s bring food to your local market – what’s being delivered, when and for how much is critical.
Just like your store, each market category will have different customers, but in this case ‘audiences” and all of them in different socio-economic environments.

There you have it, the new TV.

Now taking this into consideration there will become even more reason for fair management.

This is where the government comes in. Each country around the world has different cultural rules which will drive new regulations, especially in light of the dynamic nature and rapid chance of the TV industry. In fact, these new regulations could restrict or redirect future growth in the industry.
In other industry silos – financial, education, health etc, when the government gets involved, it signals that real change is starting to take place. This is now the case in new Television.

How this is starting to play out: A couple of weeks ago I had the opportunity to be the Chairman of the OTT TV World Summit in London. During this Summit many smart executives contributed, but many were there to search for insight on how they and their companies could participate. There were operators, there were ‘skinny bundlers,’ turnkey service providers, all of which were ready to pull the trigger. However, there was a large cloud (no pun intended).

There was the usual suspects that all where interested in hearing what they were doing; MSFT/Azure, Viacom etal.

But really what was creating more than a little bit of chaos was D2C – Direct to consumer television programming – live and on-demand over an MCN (multi-channel networks).

This is an escalating trend, with fairly straight forward executions by content holders of the libraries segmented into categories, packaged and presented under a cool name; for example ‘WatchTV’ (Disney), AMC’s ‘Shudder,’ and Bell Media’s (Canada) ‘CraveTV.’

So, with the growth of what is called “over-the-top” (OTT) new video programming options away from Cable such as Netflix, Amazon Prime, Roku and if it ever comes, Apple TV, the Federal Communications Commission (FCC) here in the US is going to take a revised look at how this is perceived, with the potential to create a new definition of a multi-channel video programming distributor (MI

In the past it was easy to identify an MVPD. An MVPD, with limited exceptions, was either a cable or satellite service provider.

However, with the wide-scale accessibility of broadband IP networks, video capable-devices, video programming distributors and facility-based IP networks, there are now many options for “broadcasting” video programming. The FCC’s Notice of Proposed Rulemaking (NPRM) seeks comment on whether any “new or emerging video programming providers should be defined as an MVPD” and, if so, what rights and obligations currently imposed on MVPDs should be extended to these new services and their providers.

Mmmm. This is a big task.

The first task for the FCC is to determine which services fit within the statutory definition of an MVPD.

The FCC has proposed two alternative ways of defining these “new” MVPDs:
1) those that provide multiple linear programming streams; or
2) those that provide multiple linear programming channels and also own the transmission paths.

Up until now, the FCC has defined an MVPD as a video programming distributor that also owns the transmission path on which it provides service. Nothing new, these were the carriers – Cable, Telco’s and Satellite.

Under the “linear programming” approach, any video programming service provider that provides multiple streams of pre-scheduled programming potentially could be defined as an MVPD. If they were then, they would then be exempt from this definition as they would be “on-demand” video programming available ie. Netflix or Hulu.

The FCC also is also going to be seeking comment on possible limitations to these new definitions, which would exclude providers that only provide content they own (for example, MLB.TV).

Alternatively, if the additional requirement of ownership of the transmission paths is adopted, most OTT service providers would now not be defined as an MVPD, since their services run on broadband networks owned by other providers. For this reason, the FCC has tentatively concluded that the more-inclusive “linear programming” definition is the appropriate approach.

In addition, the US FCC will be seeking comment on how the newly-acquired status of being an MVPD would affect all of the video programming services and has both obligations and rights when it comes to providing video programming.

For example, an MVPD is entitled to enter into good faith negotiations to negotiate retransmission consent agreements with broadcast stations (a big-deal). Further, the FCC’s program access rules require MVPD-affiliated programmers to make their programming available to other MVPDs on a non-discriminatory basis (non-exclusive).

There also are a host of obligations that are imposed on MVPDs, including Equal Employment Opportunity requirements, closed captioning and video description requirements, Emergency Alert System obligations, and rules dealing with the competitive availability of navigation devices. The NPRM requests comments on whether, if IP-based video programmers are redefined as MVPDs, certain current rules should not be applicable.

In addition, the FCC will be seeking comment on whether a new category of MVPDs that could be created would cause uncertainty for existing MVPDs which have entered into programming contracts and whose value may be reduced if the program access rules apply to the expanded universe.

Other issues may arise with respect to expansion of the MVPD definition. For example,
- current copyright statutory license permits
- retransmit broadcast performances
- payments of a statutory use fee.

And if all of this took place it would create of expanded universe of MVPDs would create conflicts with the existing copyright law.

Concern that content owners have typically withheld the right to distribute their content on the Internet when licensing it to cable networks or broadcast stations.
If the FCC actually expands the MVPD definition, current video programming networks carried on new MVPD systems may be constrained in their legal ability to distribute their programming over the Internet/IP if they are reclassified as MVPD’s too.

So, now we’re getting complicated…in another observation…the market is getting really very real.

Finally, there’s now interest in addressing the transition to IP-based distribution networks and how to regulate separate OTT services – which is the true holy grail. With that it is tentatively concluded that a cable system migrating to an IP-based distribution method would still be treated as a cable operator under the proposed rules. On the other hand, if the operator begins to offer separate OTT services (which they have in their plans) except selectively over an IP network ie. the Internet, then that class of service would be classified as a non-cable MVPD under the proposed new linear programming approach which would give the cable company a major advantage especially on any linear programming provided to the MVPDs.

These moves, while industry shaping and accelerating will likely cause a major disruption in the video programming industry as up until now, the governmental rules clearly defined the industry, with cable and satellite on one side and everyone else on the other side.

There is much more and there’s a lot about to change….bottom line – the TV market is about to explode – get ready!