Canoe Ventures has been around since 2008, and "the future of television" doesn't seem much closer to fruition. As David Verklin, CEO of Canoe Ventures, said Friday at the paidContent 2010 conference at the Times Center in New York:
"I think speed and cable are not often words you hear in the same sentence."
Due to the stranglehold that the cable companies have over their business model, they have a bit more wiggle room when it comes to delivering an online transition than many entrenched businesses. But there's no guarantee that this cable company consortium will succeed in its efforts to bring cable content online. And that is a fact of which Canoe Ventures is all too aware.
"We named our company Canoe because the only way you can get the six major cable companies to work together on a coast-to-coast venture is to get into the same boat...It's a great way to travel, but it's a bit tippy."
The consortium of Canoe Ventures includes participation from major cable providers including Cablevision Systems Corporation, Comcast Corporation, Cox Communications Inc. and Time Warner Cable. But after almost two years of existence, the group has yet to produce any substantial products. Verklin announced on Friday that Canoe's first product will be an interactive TV software package.
But he says they group is purposely moving slowly:
"If you want to go fast, go alone. If you want to go far, go with a group."
But the question remains as to whether Canoe will find success with the group it has in place. Not all of the cable providers have signed on, for starters. While that may seem like a weakness, another digital video consortium found success without complete participation from the major players. Hulu has been seen as a huge consumer success, and CBS network still has not provided access to its video on the portal.
According to Quincy Smith, former CEO of CBS interactive, the network wasn't ready to add its content to a consortium before the advertising model was secured online. But Hulu leapfrogged over that hurdle by pointing viewers to CBS content through its site.
100% participation is not likely to be the thing that will sink Canoe. According to Rio Caraeff, president & CEO of Vevo:
"You don’t need everyone, but you need more than one entity to attract advertisers and viewers."
And Canoe has that. For Verklin, his goal is to prove a clarity of purpose with the companies that comprise Canoe:
"You can't even get one company to agree within itself on strategy. The only way to [make this work] is through mutual self-interest."
Still, the biggest thing working in Canoe's favor remains its stranglehold on cable content. Rich Greenfield, an analyst at Pali Research, says that cable companies benefit from "a huge business model controlled by a small group of companies. The existing ecosystem is hard to upsest."
Even still, that's not to say that Canoe will get authentication right. Says Verklin:
"The world is filled with failed joint ventures. The success rate is about 50%."
And when Canoe's online and interactive products do go live, it may not be consumers who are most satisfied. It's still advertisers that Canoe is interested in. Verklin jokes:
"Think about all those Shamwows and Snuggies we intend to sell over the next decade."