TV executives are finally embracing the business potential of digital streaming. Now they have to grapple with the next challenge: whether to build the technology internally or outsource it.
HBO’s decision to outsource development of its planned over-the-top streaming service to MLB Advanced Media highlights a view among some media companies that the cost of developing in-house may be too great. Some in the industry, like Viacom, have centralized digital efforts to get the most bang for their internal technology development buck.
The debate over the right approach is intensifying as media companies start to embrace over-the-top streaming. The new services—including those already launched by CBS and DirecTV and planned by HBO—are forcing TV networks to embrace technology in a way perhaps not seen since the 1940s and '50s, when the television industry grew from what was then a brand new technology. One industry veteran says the build versus buy debate reflects “religious battles” over how technologically sophisticated media companies need to be.