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Nets get together

“Some major TV companies have found another piece of broadcasting turf where they are putting aside their differences and linking arms in support of each other – the online catch-up TV domain.”

Whenever two big business rivals stop fighting  and start working together, you know something important might be about to happen.

Broadcasters occasionally team up to co-fund big documentaries and dramas; they will share news coverage and they will pool coverage at a huge sporting event to save everyone time and money. But now some major TV companies have found another piece of broadcasting turf where they are putting aside their differences and linking arms in support of each other – the online catch-up TV domain. The idea is good but some questions remain.

In Germany, the first step beyond individually-branded broadcaster sites is being led by ProSeibenSat.1 and RTL. Although commercial rivals, they have announced a joint online site to promote and signpost users to their respective TV programmes.

In the UK, meanwhile, the BBC, ITV and Channel 4 have joined together in Project Canvas, a platform that will give access to their TV content across devices connected to the broadband internet. Project Canvas, which had a tough time getting approval from regulators in the UK and is still facing opposition from pay-TV providers BSkyB and Virgin Media,  is set to launch in the first half of 2011.

The proposed RTL-ProseibenSat.1 site in Germany has the working title of Amazonus. The plan is for an open platform that other broadcasters can join, including the public service channels. The site will be advertiser-supported (at least at first) and will be a way for broadcasters to leverage their advertising attractiveness online. Amazonus must first be approved by the EC, but the idea is to do a German version of Hulu.com. Not only could Amazonus create a one-stop search for users (no need to remember where or when a programme was aired, just go to Amazonus) but it will keep the likes of Hulu and other pretenders at bay. The new site will not exclude broadcasters from continuing with their own sites, including pay sites like ProSiebenSat.1’s Maxdome, the biggest of its kind in Germany for TV and film.  Amazonus could also short-circuit another big online player, YouTube, which does not yet have many agreements in Germany to provide long-form TV programming. Both YouTube and Hulu.com have their eye on Europe’s biggest advertising market and are talking to any broadcaster or producer who will listen to a pitch.

Although information about Amazonus is still sketchy,  people close to the project say it is being designed to be like the UK’s Project Canvas as an open platform and it will not itself own any content. This means it will hopefully pass the kind of regulatory scrutiny that foiled abortive UK online aggregation service Kangaroo. One source said that Amazonus is more a “high-level signpost” for German broadcasters’ programming online: “It is a good way to pool marketing and promotion resources towards a single point.”

European broadcasters are rightly eager not to be cut out of the online viewing pie and  potential related advertising money. The appetite for online TV viewing is clearly there. According to UK regulator Ofcom’s consumer research, almost a third of all UK households with internet access used it watch online catch-up TV in the first quarter of 2010, almost eight percentage points up from the same period in 2009.  And 2011 looks to be the year of the connected device, with the internet available on an increasing number of mobile and tethered displays.

Another sign of maturity of the online TV space is that the three-year-old Hulu, owned by NBC Universal, Disney and News Corp, is reportedly planning a US$2bn (e1.6bn) IPO on the stock market.  With some 28.5 million unique viewers, Hulu is regularly in the top 10 most visited video sites according to ComScore, and in July scored the highest number of video ad impressions at 783 million. Hulu says it took in US$100m in advertising profits in the first half of 2010 and expects to double that the second half. And it is getting into the paid-for space with the planned launch of a US$9.99 subscription service, Hulu Plus, for newer programmes. But some critics think the IPO could be related to unease among its shareholders, who are keen to build up their own branded sites like nbc.com. They also face a problem of undermining programme sales to secondary cable and satellite windows: why should a channel pay over the odds for NBC shows that have been free to view online first? And Hulu’s plan for a pay service indicates that the free model is not good for all content. If people are still willing to pay, why give them away for free?

The next 18 months will be very interesting indeed for the evolution of how broadcasters approach online content distribution and sale. But it’s clear that there are lots of players fishing in the waters that lie between broadcasters, platforms, devices and consumers online. In any case regulators should not close down ventures that are still finding their way. Let’s hope Amazonus avoids the regulatory hammer better than Kangaroo.

Kate Bulkley is a broadcaster and writer specialising in media and telecommunications. tellkatenow@aol.com.


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