The pay TV business is changing. So much so that the FCC is currently asking whether the definition of a traditional cable TV provider, or multichannel video programmer distributor (MVPD) as they call it, should change to be more inclusive of the emerging OTT provider. Unity Telecom is the latest to push this envelope with the announcement of their pending Broadband TV service, using Entone’s Fusion TV platform.
Unity Telecom is an investor owned service provider who offers a variety of voice and entertainment options through a dealer/agent network. With their new Broadband TV product, Unity will enlist a dealer network of 3,500 retail locations to offer the OTT service. The dealer for this product has not yet been revealed.
Their Broadband TV offer utilizes an Entone DVR set-top-box, which integrates OTT content from a variety of sources including Vudu, with over-the-air local broadcast signals for local network channels. Unity and Entone hope to avoid the retransmission consent headaches that other OTT providers like Aereo and Skitter are now facing by using an antenna at the subscriber’s home for local channels.
“FusionTV appeals to a growing segment of consumers who are attracted to the economics of FTA local broadcast content complemented by online media services,” said Andrew Morton, Vice President of Broadband TV Solutions at Entone in an Entone press release. “Unlike standalone OTT services, this is an Input 1 service that blends on-demand entertainment with live TV and DVR, just targeted at a more cost-conscious market segment than premium Pay TV services.”
Unity Telecom joins a growing chorus of new entrants into the pay-TV market segment who are trying to carve out a business model that blends OTT video delivery with some sort of local broadcast option. It’s a risky venture, considering consumers have yet to decide whether there is room for such a model – at least a model that is profitable.
That’s not going to stop new entrants like Unity from trying. The pay TV business model will surely change. But to what? That’s one of the most widely anticipated answers of the industry.
Essentially all Unity is doing is providing a portal via the Internet to OTT providers similar to Hulu and Netflix. Those content providers would love to make the ISPs responsible for payment since they could enforce it on all customers like ESPN and others do. The 90% would be ruled by the 10% once again and it breaks the business model just like the current cable only business model is broken by rights fees.
Good point. Does this approach simply shift the model to the Internet, with programmers holding distributors over a barrel, the same way they do today.
I think this model could work if telcos don’t have to try to build margin into programming fees. If your just a conduit to OTT, but you can charge more for broadband (obviously enough to cover the stb), then it could be a win win.