How Americans consume video content like their favorite TV shows and movies is changing. But a new proposal before the Federal Communications Commission may alter how TV marketers, who rely on the medium, advertise in the future.
The FCC is mulling whether to treat certain online video services the same as cable and satellite TV providers, according to a Sept. 29 report in Mashable. That means the major networks and content creators that broadcast TV over publically owned airwaves would have to negotiate with online TV services about when and how they can distribute television through the cloud. The rules would not impact online video services like Netflix or Hulu, which don’t show programming on a regular schedule.
“This is a very big deal. It could pose very significant challenges to the traditional [cable TV] bundle,” BTIG analyst Richard Greenfield was quoted as saying in a report. “While this could be a positive for broadcasters in the short-term, it opens up the ability for a wide array of tech companies to become TV broadcasters, all subject to ‘good faith negotiating’ requirements, which could destabilize big video bundles going forward,” Greenfield wrote in a blog post that addressed the impact of such an FCC move.
The bottom line, according to Mashable: “While there are no shortage of specifics that will need to be addressed, the new rules could open the massive television industry to a never-before-seen level of competition since, theoretically, just about any Internet company could become a cable provider.”
The proposal under consideration by the FCC comes at a time when the TV habits of Americans are changing quickly.
Recent studies show that Smart TV is here to stay – the most important feature consumers want in a new television is connectivity and they’re watching on every screen they’ve got, with the number of connected devices expected to double to more than 200 million by 2017.
But research also shows that many marketers haven’t quite cracked the code yet, with 60% of media buyers surveyed saying they aren’t sure how to purchase the ads shown by popular streaming services.
Whether regulators make a decision that online TV services to the mix remains to be seen. But one thing is certain — smart marketers need to watch the space to get out in front of new opportunities or judge the impact on traditional broadcast channels they use now to promote their brands.