Will TV Everywhere Growth Slow Direct-to-Consumer Push?

Reading the startling TV Everywhere usage stats that were contained in areport from Adobe this morning had me thinking about a recent Discovery Communications conference call, where CEO David Zaslav warned that Discovery might shop its networks directly to consumers unless the cable industry improved TV Everywhere platforms.

“If TV Everywhere doesn’t develop the way that it should, which would a positive for all of us …  it will require all of us to go directly to consumer because the cable guys aren’t getting it done,” Zaslav said on Discovery’s fourth-quarter earnings call on Feb. 19.

With authenticated pay TV Everywhere subscribers watching 2.1 billion videos in 2014, up 266 percent compared to 2013, one could argue the cable guys are getting it done. Adobe also reported that 12.5 percent of pay TV subscribers were actively viewing TV Everywhere content in the fourth quarter, up from just 4.4 percent in the first quarter of 2013.

Adobe predicts that active viewership of TV Everywhere content will hit 18 percent by the end of 2015, and that mobile devices will overtake desktop video viewing by the fourth quarter of 2016.

While the Adobe report shows substantial growth in TV Everywhere usage, it doesn’t contain data related to advertising revenue from TV Everywhere. Being able to accurately measure viewing on any device and platform, and monetize multiscreen viewing through targeted advertising, is something Zaslav and his counterparts at other major programmers have said is essential for TV Everywhere to succeed.

Several programmers have launched, or announced plans to launch direct-to-consumer offerings in the last 12 months, including WWE, HBO, Nickelodeon and Tennis Channel.

The Adobe Digital Index report likely won’t prevent other programmers from launching over-the-top networks, or stop programmers from investing in having a direct-to-consumer option that could be used as leverage in negotiations with pay TV distributors. But the numbers might be something that could slow the push to launch over-the-top networks a bit, and the report could help distributors argue that the TV Everywhere model isn’t broken.

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