Why live rules even in an online world

Freesat has been watching proceedings across the pond regarding Aereo, the new live online TV service from the States, with interest. For $8 a month, Aereo allows users to stream live, broadcast TV channels over the Internet to their PCs and iOS devices. The concept is simple, but Aereo’s short history has been anything but, attracting Lindsay Lohan-levels of legal issues since launch.

We’ll leave the legal ramifications of the case to the experts, but we think Aereo throws up some interesting propositions from a service point of view. Aereo is, for all intents and purposes, a live broadcast TV service, albeit one delivered via the Internet. But viewers don’t care about where the programmes are coming from – they care about the programmes themselves. Clearly Aereo thinks people will pay for the convenience of watching these programmes – that they already get for free – on different devices. But there is no License Fee in the US, meaning Aereo users aren’t paying twice for the same programmes, as would be the case in the UK. Research Freesat has done shows that the fact that viewers already pay their License Fee is a big barrier to them paying for extra TV or programmes.

We also think it’s significant that the service is purely focused on live programming, as this is something all-too-easily forgotten when it comes to streaming. Video delivered via broadband is often seen as synonymous with on-demand, but there is a huge audience for live streaming. 820,000 people watched Andy Murray win gold at London 2012 online; globally, a whopping 72 million people watched the royal wedding on YouTube in April 2011.

But you’ll notice that the above examples are for huge, live events – events that people feel they simply cannot miss if they are away from their main sets. But is the use case for live streaming outside the home any broader than this? For some customers, certainly. But for many, Freesat thinks not. For one thing, the times when you’re outside the home and can watch TV are fairly limited. It’s certainly not advisable when driving, and trying to live stream something on public transport while travelling through patchy reception areas can be like pulling teeth. Watching at work tends to be out (unless you’re “working from home”, of course); even our telly-loving MD tends to draw a line at this.

There’s also the fact that TV watching is an experience. Big appointment-to-view dramas and comedies get a lot of hype, but the majority of TV is not appointment-to-view – only 58,000 tuned in to the much-hyped opening episode of “Mad Men” on Sky Atlantic. Lots of viewing is simply people turning their TVs on and deciding what to watch depending on how they feel, whether they want to be entertained or educated, who they’re with, and so on. To put it another way, watching TV is more than just about the programme you’re watching – it’s about context, mood and environment. And for many, the number 29 bus is not going to be the environment to enjoy watching TV.

Giles Cottle is Head of Strategy at Freesat

Bus

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4 comments on “Why live rules even in an online world

  1. but i think the really exciting thing about Aereo is not live TV anywhere but the network DVR feature and the ability to set a recording and watch it without needing any equipment in the home…..

    • The excitement of network DVR may soon be reduced by the invasive controls that many content providers want to have in such an environment… The local PVR gives many the (legally mandated or at least excused) precedent to record and keep forever their favourite programming in an equivalent of the VHS form, unlike the ‘can’t skip ads’, ‘can’t keep it for more than two weeks’, ‘can’t keep it unless you are still subscribed’ future that content owners want to deliver. The customer expectation isn’t going to be compatible with the product… Anyway, back to Giles’ view… which is shared by stats reported at Cable Congress, that Live is not just the majority of viewing … it is overwhelming the dominant viewing model for some operators at 95%+ of total viewing hours. Also the case for mobile viewing is very overrated once you realise that much of this ‘mobile’ viewing is from within the home because the main TV is being used by others. The use case for many persons is that when they are not at home, they are largely doing something else and don’t have the time for video watching (but may do audio).

  2. Thanks for all your comments. Damien – I definitely think the network DVR will be useful for some viewers, but what interested us is the way that Aereo is advertised and marketed – the main message is still about live channels. We also need to remember that even in a DVR home, 80%+ viewing is linear (see the Thinkbox research here – http://www.thinkbox.tv/server/show/nav.898), and for an out-of-home service, I’d guess the proportion would be even higher if, as we suspect, one of the main uses of an Aereo-like service is people using it to catch “can’t miss” TV shows like sports, big events and so on).

    Ian-good point-again, Aereo is being pitched as simply a “DVR” (no mention of cloud or network) – an early adopter would probably get the distinction between what a cloud-based DVR could offer and what a disk-based one could, but I wonder if a more mainstream audience could.

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