OTT Watch: 5Qs with Net2TV Founder/CEO Tom Morgan

With ARRIS adding Net2TV’s OTT streaming service Portico TV to its set-top boxes beginning in Jan, we checked in with Net2TV CEO and founder of BlackArrow Tom Morgan. Net2TV curates short-form video into longer-form programs. How does that fit into cable operators’ strategy as they move to integrate more OTT content? Cable operators are looking to integrate these “new channels” into their traditional services as a value-add, viewer-retention strategy. Churn is a significant issue in the industry, and the more we can bring these emerging channels into the traditional services, the more we help operators retain their viewers who want the best of both worlds. It looks like the benefit, from the MSOs’ perspective, is that they get branded content from Net2TV without paying a recurring fee. The recent carriage wars are driven by escalating costs of programming. Our channels are not based on a carriage contract. They are compliant with the Dynamic Ad Standards of the cable industry, and not tied to the traditional C3 ad split relationship. They are not traditional 7/24 linear channels, but are branded, long-form, AVOD channels that fit more of a topical news magazine style. How do you transform short-form video into longer-form programs and customize them to fit operator needs? We have built a technology platform called Dynamic Channel Management System. We use this system to curate long-form shows with dynamic interstitial ad slots that can be fed both into the operator ingest systems for on demand, or can be directly played into environments that use cloud TV technology like the AVN H5 system. We can build unique shows that are “localized” to the service territory or simply distribute our existing topic-based channels. Either way the end product is high-quality programming, with DAI already slotted, which can be sold by the operator sales team. Are you seeing new ways to monetize OTT content and integrate that with operators’ linear offerings? We are now being asked to curate some of our shows into 22-minute segments with closed captioning because some of the distributors want to put the shows directly on air. Not only does this generate new linear ad inventory, but it also generates cross promotion for on-demand viewership. I would expect to see a deal like this probably mid-year 2015. From a TV Everywhere rights perspective, can your content be watched anywhere, on any device? Yes, because we do most of our play-out integration in the cloud, we can be extremely efficient in bringing up dynamic channels on virtually any connected device. To date we have been feeding an app called Portico, but as the market matures we have realized that we have to focus on direct-channel distribution into the platform and operators’ UI. Our shows are not currently included in any TVE-based environment, but expect that to change.