Turner appears to be moving in the direction of direct delivery to consumers. To do it, the company is intent on building out its own technology stack. With investments in streaming and app development technologies, the company has made a good start. But it will need to spend much more to own the complete delivery stack.
Turner opts of technology ownership
Last year I wrote a piece asking if TV content providers need to become OTT technology companies. Some say yes, like Hulu, and some say no, like HBO and Sling TV. For Turner, the answer appears to be a resounding yes. In an interview with Recode last week, Turner CEO John Martin said:
“I believe it’s imperative that we put the company on a course, to be in a position to offer an end-to-end solution, direct to consumer.”
Mr. Martin views owning the technology as a strategic imperative. He is preparing for the day, which he thinks is between 7 to 10 years from now, when “…if somebody wants to get our networks from us, they can.”
The company started down that path with the acquisition of streaming technology provider iStreamPlanet in the middle of 2015. This week Turner expanded its end-to-end reach by leading a $12M series B investment in app platform provider You.i TV. Turner will soon release a direct-to-consumer app called FilmStruck leveraging You.i’s app approach. As part of the announcement, Turner says it will move to standardize its app development on the You.i Engine.
Why the app platform is so important
The app development platform is a particularly critical part of the technology stack for any company. With the fragmented state of device app platforms, the burden of development can rapidly spiral out of control.
One of the ways to control the app development burden is to create a shared codebase from which all the specific app variants are derived. This is the approach provided by You.i. The company’s app engine is based on development in C++. This is unusual in the app development world, where most development is done in higher level languages, such as Python and Java. This makes it harder to do the core development, and harder to find resources to write the code.
However, according to Turner’s CTO, Jeremy Legg it is worth the extra effort:
“This enables Turner to maintain a single code base for alike capabilities across applications — things like DRM, Authentication and Registration services.”
Mr. Legg sees the approach providing some key benefits to the company, including:
- Increased ability to iterate app designs
- Heavy code reuse across multiple apps
- Ability to share the codebase across multiple brands in the Turner family.
The net effect of these benefits provide big advantages for Turner going forward. Mr. Legg says:
“I’d say over time our application development costs will be reduced, because we will gain plenty of efficiencies that should save us money.”
With the investment in You.i and the acquisition of iStreamMedia, Turner has the beginnings of a solid service delivery platform. However, it is far from complete. Expect to see the company make additional investments in areas such as billing, customer management, and content management.
Why it matters
Content companies differ on how to approach the technology of delivery online.
Some think they need to own the technology stack, others think it best to outsource it.
One thing that ownership brings is control, and for some this outweighs the negatives of the approach.