NCTC navigates uncertain future of video

With traditional pay TV no longer a growth business, many smaller and independent operators are trying to figure out what’s next for video – and according to leadership at the National Content and Technology Cooperative (NCTC), there are few, if any, clear cut solutions just yet. And while the ultimate vision of video for the group’s service provider members remains to be seen, it’s unlikely to be a one-size-fits-all approach.

Speaking to StreamTV Insider, NCTC CEO Lou Borrelli described changes in the TV and service provider landscape.

“We are all trying to adapt and adjust to a situation where video was the product. And now it’s a product, but it’s a product that is yet to be defined going forward,” he said.

NCTC has a member base of roughly 700 companies, many of which have come together this week for the organization's annual The Independent Show, taking place in Minneapolis through August 2 with partner ACA Connects. NCTC member companies span a wide range, with some that count broadband customers in the millions, while others have just hundreds. With those differing bases come different needs and where, as Borrelli explained, NCTC steps in for essential or non-essential services depending on size, with the need to explore a variety of options to address the scope of members.

Still, while operators faced with rising programming costs and shrinking pay TV bases have deemphasized traditional video services  – which as Recon Analytics’ Roger Entner previously put it, has become “a zero margin business” -  to instead focus on higher growth connectivity services such as broadband, Borelli noted that video was always the bedrock on which NCTC was founded.

“So while we are seeing the widely reported decline of linear video customers, we still have a very big chunk of them, and our members want to figure out what to do next,” he commented. “That’s kind of where we’re at. A lot of ideas, no solutions.”

Judy Meyka, EVP of Programming, has been with NCTC for over a decade and is a more than 20-year industry veteran, primarily in roles of negotiating programming agreements. During her tenure she’s witnessed times of transition as well as long periods of very little change. But Meyka said lately she’s seen a lot of changes happen very fast.  

With the proliferation of direct-to-consumer streaming and wave of free ad-supported streaming TV services (FAST), changes to TV landscape are something NCTC members can’t turn a blind eye to, she noted.  

“It exists so they can’t completely ignore it,” Meyka said. “But I do think they do have different attitudes on how that fits in with their overall products and services.”

When it comes down to it, “the traditional cable package has just become too expensive,” she said. And it’s something that has to change if there is indeed “any kind of a long-tail life left in that product.”

The organization’s members are all in different stages of the video evolution, according to the programming exec, meaning solutions to video can be a mixed bag and are still evolving. Which route a provider chooses and how far along they are on a given path can sometimes depend on their starting point, be it a telco, over builder, or traditional cable operator – as well as what type of area they serve, be it rural or urban.

“We have 700 plus members, if you ask ten members, you’d probably get ten very different answers,” she said in regard to video strategy. “It is kind of a continuing process and one size doesn’t fit all for sure in our world.”

Some telcos, such as WOW! and Frontier, this year said they would move away from offering traditional video and instead make virtual MVPD YouTube TV their primary video offering. And just last week during earnings, CEO Chris Winfrey of cable giant Charter said that the company is at or nearing indifference on video as a standalone product, and plans to offer the forthcoming Xumo streaming device (which aggregates linear TV and streaming apps with unified search and discovery via voice remote) as its primary video offering going forward.

NCTC members aren’t necessarily saying they’re not doing any video at all anymore, according to Borrelli but rather thinking along the lines of “the current business model doesn’t really support the amount of time and effort we put into it.”

Some are being more aggressive in their pivot away from video, while most, he said are just letting it play out, while asking what’s next? Which is where NCTC hopes to fit in.

While Borrelli emphasized no one has the definitive answer yet, that doesn’t mean NCTC isn’t pursuing options. For example, last October the cooperative struck a deal with MyBundle, a company working to play the role of aggregator between a large pool of smaller and independent broadband and service provider partners and streaming services, as one solution to offer members new avenues for video options.

MyBundle is a very strategic partner for NCTC, Borrelli said, with a good concept that continues to develop. But he acknowledged there are other aggregators that could also be candidates for deals.

“We’re here to create choices for our members,” he commented. “If we were sitting here a year from now, it would not be unusual for us to have multiple choices, and those choices could be viewed as either confusing or inconsistent.”

That goes back to the varied base, as he pointed to the two sides of NCTC membership – one encompassing large members that count big subscriber bases, and then the other universe of small providers “which by numbers is actually greater.” And NCTC’s role is to advise- as to the best way to get what fits their respective needs.  

In terms of video options, Borrelli acknowledged the organization talked to Charter and Comcast when the Xumo platform was first announced. He cited “possibility there” but also noted that when providing choices for members, they depend on NCTC “to make sure that it’s tried and true and tested,” suggesting a possible a wait-and-see scenario.