Since my earlier post, not only has TV Everywhere received a lot of coverage in the trade and business press, but I’ve also spent some more time thinking about the topic, talking about it to folks in the industry. I decided to write another post on it, examining some of the high-level issues relative to its long-term success. (Disclosure; I am a shareholder of Time Warner (TWX) stock and was a senior executive at TWX subsidiary AOL for a short period of time.)

I am convinced that the key to TV Everywhere’s long-term success will be its user interface. That point may seem obvious and common-sensical, but then again, obviousness and common sense are all too often forgotten when it comes to developing and implementing business strategies in large, multinational corporations. Here is why I believe that the user interface will be so critical to TV Everywhere:

• The brand is at risk; implementation matters. While the business driver behind TV Everywhere may be the need for video programmers to assure cable operators that they won’t permit content that operators are paying many billions of dollars for to “leak” directly to viewers on the Internet for free, to viewers, it is all about them. To them, the gateways or interfaces that bring them the programming will directly affect their attitudes toward that content’s brand, whether it be HBO or TNT or Court TV. When it is all about “me,” the interface is the embodiment of the relationship.

• Intuitiveness, elegance and ease-of-use are critical. TV Everywhere will require some relatively complicated cross-platform rights management and real-time authentication. Bad, clunky interfaces create frustrated, unhappy viewers. Intuitive, elegant and easy-to-use interfaces not only create happy viewers, but real market separation. Just ask Apple and its customers.

• Critical step in another long-term programmer, operator tug-of-war. The history of the relationships between programmer and system operators has always been one of mutual envy, tension, fighting for leverage, standoffs, and gamesmanship. Managing the barrier between paid television and free Internet will be all of that and more. In the long term, both the programmers and system operators want direct relationships with the viewers. In a media world of scarce distribution — the television landscape for the past several decades — operators had the upper hand, which is why their ARPU (Average Revenue Per User) is so high. However, in a media world of plentiful distribution and scarce attention — the television landscape that is emerging — programmers may be able to take the upper hand. Issues like how authentication “keys” are managed will be crtical in new services like TV Everywhere.

No matter how you view it, TV Everywhere changes and expands the interfaces between viewers and branded video programming. In my mind, the quality of the interfaces and how they are controlled will determine how consumers view and use it and will determine how viewers will manage their long-term relationships with the operators and programmers. It will be all about the interface. What do you think?

(This post originally ran on MediaPost’s Online Spin on April 16th, 2009.)

This is why media companies are suffering from such extraordinary audience fragmentation, having to work so hard to capture audiences and even harder to keep up their ad rates. Certainly, the maintenance of ad rates is also under extraordinary pressure from the current financial crisis. But what I think is clear to most, is that if media companies don’t solve their “audience problem” (or “business model” problem) by the time this crisis is over, their businesses will probably be over anyway. Thus, it is critical today for media companies not only to structure their businesses to survive the crisis over the next two or so years, but to structure them to be competitive in what will certainly be significantly altered media landscape that values audience attention, not media distribution. Here’s some of what I think folks should expect from this new media reality:

• Smaller mass media. Audience fragmentation will not only continue, but accelerate. It will be harder and more expensive to truly capture and keep audiences’ attention.

• Heavy, inflexible fixed cost structures mean death. Not only that — but the inability to move nimbly and develop, test, measure and adjust new media products to audiences in a constant and dynamic way will also mean death.

• Exposure-driven ad model dies. In a world where media distribution is scarce, so are audience exposures. In a world where media distribution is plentiful, audience exposures become plentiful as well and very, very cheap. This is why MySpace, Facebook and Twitter are killing the CPM-driven model of the current display ad model in the online world. It is only going to get worse. In a world where attention is scarce, value shifts away from the exposure and toward either unique sponsorship (athlete or sports team) or performance (Google AdSense). Anyone stuck in between will die.

• Subscription relationships become even more precious. Where attention is scarce, those companies that already have access to both the attention and wallets of audiences have a perishable opportunity to hold or expand those relationships, but they will need to move quickly and aggressively. Whether these efforts look like Jeff Bewkes’ “TV Everywhere” strategy or sports teams giving season ticket holders free hot dogs and preferred parking, it is incumbent on media companies to find ways to hold existing subscriber relationships, at all costs. The advantage that such relationships give companies over their competitors is enormous, particularly when times are tough. Just look at the ascendancy of cable programmers and their dual revenue streams, relative to broadcast networks and their ad-only models.

• Audience re-aggregation becomes critical. As audiences fragment, it become even more important for media owners to participate in scaled offerings to advertisers. Whether this means more consolidation and more ad networks across different media, scale becomes more essential and in the future it will likely only be achieved through “re-aggregation” plays that combine access to audiences from multiple properties for sale to advertisers and marketers.

As you can tell, I think that our media future is going to be all about audience attention rather than media distribution. What do you think?

(This post originally ran on MediaPost’s Online Spin on April 2nd, 2009.)

I’ve spent some time over the past few weeks pondering the viability of TV Everywhere. After much thought, I have replaced my skepticism for its prospects with guarded optimism. (Full disclosure: I am a shareholder of Time Warner (TWX) and briefly worked for its AOL subsidiary) Here is why:

Narrow focus of initiative. TV Everywhere is first and foremost about protecting the relationship between television programmers and pay-television system operators. Cable and satellite operators pay many billions of dollars per year for the exclusive ability to provide their subscribers with content. If programmers offered viewers unrestricted access to that same content for free over the Web, similar to what some broadcasters do on Hulu, programmers’ most important business relationship would be forever undermined.

Doesn’t depend on substantial change in consumer behavior. The vast majority of U.S. households already subscribe to pay television services. Thus, using TV Everywhere on the Web (or mobile too, I suspect), will be a simple compliance issue and piggy-backs on an existing subscription. This is not like the efforts of early online services or music companies to establish new consumer subscription services. Certainly, there is a lot of talk these days about consumers bypassing their traditional pay-TV providers and going straight to the Web, but I don’t think that mainstream America is going to go that way for some time. This is going to be a long transition, and cable and satellite subscriptions and set-top boxes aren’t going away anytime soon.

TV viewing experience doesn’t micro-chunk (or commoditize) easily. Whereas newspapers found out that in the open digital world — where content is easily “micro-chunked” and redistributed — their individual stories ultimately carried more value than their entire daily package, long-form, studio-produced video content doesn’t work the same way. Viewing re-aggregated 30-second snippets does not replace the experience of watching a full season of “The Sopranos.”

Do I think that TV Everywhere will become the long-term platform and business model of all studio-produced video content? I don’t know. I haven’t really thought through all of those issues yet. However, I do believe that TV Everywhere is a smart strategy to preserve critical business relationships and consumer behaviors, while television transitions into a more on-demand and Web-driven vehicle over the next decade. What do you think?

(This post originally ran on MediaPost’s Online Spin on March 26th, 2009)