Thursday, December 1, 2011

The Future of TV and The Great Unbundling of Video Services - Jim Louderback, Revision3

We're in the end game of the of the great unbundling of video services, says Jim Louderback, CEO of Revision3, as next generation television channels shift from traditional models to IPTV video networks. Experts agree that the overall TV experience and PayTV business model will see dramatic changes over the next five years. The emergence of cloud-based services, OTT (over-the-top) content delivery, multi-screen entertainment, and the unbundling services are all driving that change.

I caught up with Louderback recently at the TV Next Con 2011 where he spoke on the executive panel session, Executive Panel Discussion, "MSO, Satellite and Telco Operator 2.0 – The Rise of the Next Gen Service Provider". He shared some of his thoughts on the changing video landscape and the great unbundling of services.

The Great Unbundling 

The internet is all about unbundling, says Louderback and the print and music industries have been unbundled. Why buy the entire newspaper or magazine when you can read it for free online, or buy a CD when you buy the track online you want from iTunes or Amazon? According to Louderback, Cable TV is next.
Louderback says, "We’re in the early days of a great unbundling of services from transport. Over the past 30 years, TV services and the cables they run upon have been inextricably linked — you paid your cable bill, and got wire and channels together… I see these unbundled cable services giving way to direct relationships between video content providers and customers." (from How YouTube Wins in the Great Unbundling of Cable TV : Jim Louderback)
Louderback maintains, that within the next few years most of the video we consume will be delivered over an open IP network, ending the long monopoly of proprietary services delivered through cable, satellite and broadcast streams. But even though our favorite shows will be delivered mostly on-demand, we'll still have bundles of services - but it will just be offered in new ways.
"Every screen, every glowing rectangle in your life is a television. You're going to want to watch television on it, and the viewers that watch Revision3 very clearly tell us that they don't care about the screen size."
Viewers are going to watch video on the best screen available. When they're on the go, they may want to watch Epic Mealtime on their cell phone, but when they get home they'll want to watch it on a big screen. Louderback says that those two things all video delivered over IP networks, and on any screen – leads to what he call "the great unbundling."

All these video services will be delivered direct to all these screens wherever they are all around the world that provides, "anytime, anywhere, any device, any session, so session shifting joins time shifting and place shifting and devices shifting." But the really interesting thing Louderback sees happening is that everything is going direct to consumer.

Super-Premium Channels, Super-Premium Bundles and Premium Independents = The Future of TV?

Louderback sees three distinct services emerging that he calls: Super-Premium Channels, Super-Premium Bundles and Premium Independents.
"Right now," he says, "your video services, your channels are bundled to the transport. So you get cable, you buy the network and you buy the video channels – that's all starting to break apart. In this IP world, I believe we're going to have types or three tiers of services."
Netflix is one Super Premium Channel, he says, and HBO is well positioned to be the second. "These single brand services provide libraries of unique and aggregated content to consumers for between $8 and $20 a month." He thinks Showtime, Epix and Amazon have potential and Hulu's future is uncertain.

Louderback says that as TV Everywhere matures, Super Premium Bundles will emerge and be offered directly to consumers from the likely suspects: Time Warner, ABC/Disney, NBC/Comcast, Viacom and Fox. These five companies will build direct billing relationships with consumers and offer a broad set of networks and shows that will appeal widely across all demographics, "and will deliver a mostly on-demand service over traditional broadband networks - with live sports, news and other events serving as anchors."(From MediaPost Publications Get Ready for the Great Video Unbundling 09/21/2011)

He says YouTube now wants to be the sixth Super Premium Bundle of services delivered direct to the consumer via IP, sitting at the same level as Time Warner, ABC/Disney, NBC/Comcast, Viacom and Fox. YouTube has been reinventing itself for some time, with its recent announcement of new channels of original entertainment coming to YouTube by A-lister stars and content producers from the TV, film, music, news, and sports fields Hollywood, its complete overhaul of the site today into a more TV-centric channel design, and that it now serves 3.5 billion videos each month, it's clear that Google wants to take on the traditional broadcast and cable networks. According to Louderback, "They want to be the Mall of America for video, with folks like us and the other independents as anchor tenants."

Louderback sees a huge opportunity for Premium Independents to build billion dollar businesses as content becomes unbundled from transport. These are companies like Revision3,, Ion, BBC America, the Hallmark Channel and others, that offer free programming over IP direct to consumers and they look very different from today's independent cable networks.
"In the end it's all about shelf space. All of us are racing to build a session-shifting experience that lives as an icon across everything from the smallest smart-phone to the biggest smart TV. Because in the next five years if it's a glowing rectangle, then it is a video consumption device - or what we used to call a TV." (From MediaPost Publications Get Ready for the Great Video Unbundling 09/21/2011)

About Jim Louderback
Jim Louderback, Chief Executive Officer, Revision3
Launched and managed operations at cable channels, magazines, websites and online video companies including Ziff-Davis, TechTV, PC Magazine and He started his career at JPMorgan Chase, and has also done work for Pepsi, National Semiconductor and Citibank. He's been CEO of Revision3 since 2007, and has guided the company to profitability and more than 40 million views a month. Jim has an MBA from The Stern School at NYU, and a BS in Mathematics from the University of Vermont. He is a fan of cooking, music, movies, companies with extraneous letters in their names and anything with a 3 in it. Follow @jlouderb


Updated: 12/2/2011 Re: YouTube redesign