The Week In Review: Mobile Cable… A Contradiction In Terms?

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April 2, 2012 – 12:03 am

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'Mobile Cable' – A Contradiction In Terms?

With all the talk of portable electronic devices serving as the television's complementary "second screen" and how cable companies are rushing to develop "TV Everywhere" apps that let subscribers watch what they want, when they want, Verizon's proposal of "mobile cable" would easily engender cheers from the tech press, right?

Well, not from GigaOm's Stacey Higginbotham, who counts the ways Verizon's idea warrants cries of foul instead of high fives.

Jumping off from a WSJ piece detailing Verizon CEO Lowell McAdams' plan to have an "integrated" mobile video service for pay TV subscribers in place by the end of the year, Higginbotham questions the consumer benefits of such an offering. So far, Verizon will have to jump through a number of regulatory hoops and will need to purchase spectrum licenses from Comcast, Time Warner Cable, Bright House Networks and Cox Communications.

The key feature of the service is that it might have some kind of a la carte model, where consumers just purchase individual channels or programs, instead of the traditional cable bundle. Entertainment companies and smaller networks have tended to resist that sort of pricing, since it would naturally under cut their current businesses.

Anyway, for consumers, the prospect of more video on their phones sounds terrific at first blush – but the rub appears to be that consumers would have to pay more – and more. Currently, most TV Everywhere services are tied to wi-fi supplied by a cable company in the home. The HBO Go app is an exception, though it does let viewers block the app when they're not tethered to wi-fi. After all, phone companies are starting to hit subscribers with higher data plan fees, and video eats up a ton of bandwidth.

As Higginbotham writes, "Does Verizon really think consumers have a burning desire to watch Project Runway via their cellular data plan? At about $10 an hour for a mobile video, that's pretty expensive. Plus, if people really want to pay for that, Comcast at least has 3G on its Xfinity app roadmap."

Granted, video is costly to provide. But the bottom line is that consumers in a tough economy watching their wallets even more closely than they watch digital video. If cable and telco companies can find a way to make these services more complementary to the main TV viewing experience, it just might appeal. But merely finding yet another way to charge subscribers for content they already believe they're paying for will just drive second and third looks at over-the-top internet video providers.

What Is Ken Lerer's New Video Site About?

Maybe focusing on one screen at a time is a tough enough job in and of itself. After all, given the troubles plaguing Al Gore/Joel Hyatt internet/cable news/information channel hybrid Current TV, why would anyone want to chase this kind of cross-screen business? Well, Ken Lerer, who knows a thing or two about creating successful news sites, appears to be venturing into the digital video news – but that's about all we know. And he appears to be largely attuned to the PC.

AllThingsD's Peter Kafka has ferretted out some details, such as it's aimed at younger demos and is scheduled to launch this summer as the coverage of the presidential election heats up. The site will be run as a joint venture between Lerer Ventures and the video provider he invested in last year, Bedrocket Media.

While Bedrocket has four YouTube channels already, the new, as-yet-unnamed video startup will primarily rely on Facebook, Twitter and social media to build its audience.

Most interestingly, the new site should arrive just in time to go up against Huffington Post's 12-hour live online video news channel, that was previewed in February. Lerer was a co-founder of HuffPo and has since left the company since it was sold to AOL for $315 million last year.

While the news business has always had greater difficulty making money than celebrity gossip. But the business models are still emerging, and just because no one is making a killing right now with digital video news, that doesn't mean someone won't in the future.

The tough thing about video, at least the way it's viewed now online, is that consumers want snackable, sharable segments as opposed to set programming. Maybe HuffPo and YouTube's more TV-like offerings will change that, especially as the television, PC, and mobile device see their screens converge. But Lerer's project doesn't seem to be pushing the envelope yet. By highlighting the social media focus of its delivery, it's allowing the medium to determine the format (one guesses), as social media is typically fast-moving, somewhat ephemeral, and all about “what everyone is talking about” in a given hour.

Ultimately, rather than looking for ways to ape the TV news form, this project – and the many others like it – may actually end up shaping the traditional model. If it can make a profit, of course. Given the amount of money expected to flow off the broadcast spending on the national political races and the summer Olympics, summer 2012 may be the best time to plant a video news site on the web.

But Wait. There's More!

By David Kaplan

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April 2, 2012 – 12:03 am

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