Broadcasters shouldn’t be so quick to give away their content online, warns Rogers executive

A top Rogers Cable executive says broadcasters need to think beyond advertising for the lion’s share of their revenue and stop giving away their content for free online. Speaking at the 2009 Canadian Telecom Summit in Toronto on Monday, David Purdy called giving free content that is not tethered to a subscription base “stupid”, and stressed that broadcasters need to find ways to examine a holistic revenue generating mechanism. “I question whether not there’s a better model. I believe that if customers subscribe to Discovery Channel, they should be able to watch everything about the Discovery Channel online. But if you don’t subscribe to Discovery Channel, I don’t understand why a show that you paid for on the linear platform, you would give away for free online,” the VP and GM of television products told Tech Media Reports in an interview after a panel discussion at the 2009 Canadian Telecom Conference Purdy, who is VP and general manager, television products at Rogers, added that an effective business model that is “part subscription and part advertising” is desirable. He also suggested that the future distribution of video content depends on multiple platforms. The proliferation of web-enabled mobile devices is making it easier for converged companies to offer video, telephony and Internet services on a single device. But Brad Schwartz, senior VP and general manager at CTV’s The Much MTV Group, which this year will distribute 220 million videos online, disagrees with Purdy, saying if broadcasters don’t offer videos online for free, young people will simply download them for free elsewhere. Schwartz argued that far from undermining the subscription revenue stream, free online videos enhance value. “The more content you make available, the more engaged people become with your story-telling. Putting your content across platforms doesn’t dilute your impact, it magnifies it,” he said in an interview, adding that The Much MTV generates about 20% of its revenues from advertising in the free online content it offers, denying that it undermines cash from subscription. Another issue that will have to be resolved, added Purdy, is content rights. “The customer believes that they shouldn’t have to pay for the same asset across each individual platform,” he said, adding that content distributers need to work with studios to figure out what multi-platform access to a movie means. As debates continue on the legal and financial aspects of content on multi-platforms, it is also important to understand the needs of users, who tend to be in the 18-34 age category, said panelist Sean Seaton, director, communications sector at Microsoft Canada. “A lot of what this generation wants comes from this generation” he said, adding that this needs to be configured into the business models. The 2009 Canadian Telecom Summit continues on Tuesday with speeches from Pierre Blouin, CEO, MTS Allstream, Konrad von Finckenstein, chair, CRTC, and Bernard Lord, former New Brunswick premier and now president and CEO, Canadian Wireless Telecommunications Association.

Broadcasters shouldn’t be so quick to give away their content online, warns Rogers executive

Broadcast | June 15, 2009

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