4C - leaderboard - 4-25-18

Analysis for 'Skinny Bundles'

  • VideoNuze Podcast #445: Exploring Pay-TV’s Record High Subscriber Losses

    I’m pleased to present the 445th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    On this week’s podcast Colin and I explore the pay-TV industry’s record high video subscriber losses sustained in Q3 ’18 (more here and here). The two big satellite services, DirecTV and Dish Network were major contributors. But perhaps more important was a dramatic slowdown in subscriber additions for the two biggest virtual pay-TV operators, Sling TV and DirecTV Now.

    As we discuss, with these virtual services in flux and not stanching the bleeding of traditional multichannel TV, the critical underlying trends of cord-cutting and cord-nevering burst onto full display in Q3. Meanwhile, the strategies and success of virtual services like YouTube TV, Hulu Live and others is murky at best. All of this shows how unstable the pay-TV industry as a whole currently is.

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  • VideoNuze Podcast #442: WarnerMedia’s Murky Streaming Plans; YouTube TV Hits a Home Run

    I’m pleased to present the 442nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    This week we first discuss AT&T’s recently unveiled plans to launch a new streaming service sometime later in 2019, anchored by HBO and including assets from other WarnerMedia properties. Details are still slim, but both Colin and I highlight many different challenges for this service would get executed and priced, especially with respect to HBO’s role.

    We then transition to talking about YouTube TV’s winning sponsorship of this year’s World Series. As I wrote yesterday, the execution is superb and includes many creative elements. For millions of viewers, it is impossible to not be exposed to the brand, and the campaign is surely leading to many new trial subscriptions.   

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  • YouTube TV is Owning the World Series, Again

    YouTube TV is back as this year’s World Series presenting sponsor and as with last year, Google’s skinny bundle is once again dominating. Watching the game last night (go Sox!) it was impossible to not be exposed to the brand and also some very creative elements of the “Watch like a fan” campaign.

    YouTube TV renewed its World Series sponsorship for 2018 and 2019 with MLB back in March of this year. As with 2017, before the first pitch was thrown, there was a highly produced 90 second ad.  At first it looked like a promo for various Fox networks, though when the Google Home demo popped in it became clear it was for YouTube TV.

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  • Plucky fuboTV Approaches 250K Paid Subscribers, Exceeds $100 Million in Annualized Revenues

    fuboTV, which started as a niche sports streaming service, but has expanded its scope to become a fully-featured virtual MVPD or “skinny bundle,” announced it is closing in on 250K paid subscribers and also has exceeded $100 million in annualized revenues. The new metrics were part of a broader performance update the company provided yesterday, which also included the following:

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  • New Discovery-Hulu Deal Raises vMVPD Profitability Question Again

    Yesterday Hulu and Discovery announced that 5 additional Discovery-owned TV networks will now be included in Hulu with Live TV, the virtual multichannel video programming distributor (“vMVPD” or “skinny bundle”), bringing the total to 8. In addition, approximately 4,000 episodes of Discovery programming will be added to Hulu’s SVOD library.

    The deal further increases the value of Hulu with Live TV to its subscribers. But it also raises the question, yet again, of ballooning vMVPD programming expenses and how these impact profitability. Traditional multichannel pay-TV providers have steadily raised their rates over the years to offset higher programming costs (leading to the lower price opportunity that vMVPDs are trying to capitalize on).

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  • VideoNuze Podcast #435: AT&T Floats Engagement Pricing; CBS Streams Super Bowl to Mobile

    I’m pleased to present the 435th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    Escalating programming costs for pay-TV operators are a chronic issue. In the age of cord-cutting and proliferation of SVOD, offsetting these costs with rate increases is no longer an option. One new solution being proposed by AT&T Communications’ CEO John Donovan is “engagement pricing,” whereby TV networks would be paid based on viewers’ actual consumption.

    As Colin explains, it’s a break from industry norms, and even with AT&T leveraging Warner Media’s networks, it will be very difficult to persuade other networks to follow suit. Why get paid on viewership when you’re already getting paid regardless of how many people watched?

    We then shift to CBS Sports’ decision this week to stream Super Bowl LIII to mobile devices without requiring a pay-TV subscription. It’s another nudge toward opening up sports to non-subscribers, though Colin and I agree the vast majority of marquee sports will remain locked behind pay-TV subscriptions.

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  • Verizon Bolsters 5G Rollout With Apple TV and YouTube TV Offers, In Sign of Things to Come

    Late yesterday Verizon announced that Indianapolis will be the fourth city to get 5G residential service in the second half of 2018. The other 3 initial cities are Houston, Los Angeles and Sacramento. Potentially the biggest news from Verizon yesterday was that it would include both Apple TV and YouTube TV in the initial 5G offering for subscribers in all 4 cities.

    It’s not clear from Verizon’s press release exactly what these offers will be or how the terms will work for subscribers. The cheapest Apple TV is currently $149 and YouTube TV runs $40 per month. If the promotion follows others we’ve seen from telcos, Verizon will likely require a minimum commitment to qualify for the Apple TV and will offer some type of monthly discount on YouTube TV. It’s also not clear what the monthly rate will be for 5G service itself.

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  • Why Google, AT&T and Disney Are Now the Most Important Players in Pay-TV

    For all the talk about cord-cutting over the years, the most important trend in pay-TV these days isn’t consumers dropping out entirely, but rather shifting from traditional multichannel services to lower-priced virtual MVPDs or “skinny bundles.”

    The trend of skinny bundle gains offsetting  multichannel losses continued again in Q2 ’18 where, according to Leichtman Research Group, the top traditional services lost approximately 800K subscribers. But just the 2 publicly-reporting skinny bundles, Sling TV and DirecTV Now, gained 383K (with the latter accounting for 342K).

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  • VideoNuze Podcast #431: Sling TV is Sliding, CBS is Accelerating

    I’m pleased to present the 431st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    It’s been Q2 earnings season, which provides a valuable opportunity to check in on how different companies’ OTT strategies are flowing through to their financial performance. On today’s podcast Colin and I talk about two companies whose OTT fortunes are moving in opposite directions.

    Moving the wrong way is Dish and its Sling TV skinny bundle. Sling TV was the first to market in the category several years ago. Though it quickly gained over 2 million subscribers, growth slowed to just 41K additions last quarter as others boomed. As Colin and I discuss, a key weakness in its service is the lack of broadcast channels. The other big skinny bundles, YouTube TV, Hulu Live and DirecTV Now have all decided to pay top dollar to include them, which is helping fuel their growth. Sling TV is at a competitive disadvantage requiring subscribers to install antennas which many people can’t or won’t do.

    All broadcasters are benefiting from the shift to skinny bundles, but CBS’s Q2 results show that its OTT success extends further, to direct-to-consumer, targeted advertising and SVOD production, as well. CBS is benefiting from decisions it made years ago to retain digital rights (most famously by not joining Hulu), even though it wasn’t clear back then how the monetization of them would fully unfold.

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    Click here to listen to the podcast (25 minutes, 16 seconds)

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  • VideoNuze Podcast #429: Comcast’s Puzzling Video Strategy

    I’m pleased to present the 429th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    On today’s podcast, Colin and I discuss Comcast’s Q2 results, which it reported yesterday. While broadband subscriber additions were up to a record 260K, video subscriber loss accelerated to 140K.

    Although Comcast management admitted on the earnings call that low-cost skinny bundles are to blame, no strategy was articulated for how Comcast will respond. By positioning itself as a “connectivity” provider that doesn’t have a low-cost OTT/direct-to-consumer alternative, Colin and I believe that Comcast’s 21 million video subscribers are very vulnerable to being picked off by skinny bundles’ aggressive promotional offers (DirecTV Now from AT&T being at the top of the list). If that happens video sub losses will accelerate in coming quarters.

    We’re both puzzled by Comcast’s seemingly passive approach to defending its core video business and discuss potential explanations. Broadband’s saturation and the coming deployment of 5G both seem to limit the upside of the connectivity strategy as well. While all of this occurring, Comcast is looking to spend $34 billion or more to expand internationally by acquiring Sky.

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  • Comcast Q2: Skinny Bundles Are Taking Their Toll On Video Business, But No Defense Of It Is In Sight

    Comcast reported its Q2 ’18 results this morning, with the good news being the addition of 260K broadband subscribers, the best Q2 the company has experienced in the past 10 years, along with the improvement of operating margins. The broadband surge was Exhibit A for management to point to on the earnings call as evidence its strategy of being a “connectivity” provider is paying off.

    However, Q2 ’18 also saw the loss of 140K video subscribers, the most in a Q2 since 2014. Video sub losses have accelerated from -4K in Q2 ’16 and -34K in Q2 ’17. On the earnings call, management put the blame squarely on virtual MVPDs or “skinny bundles,” adding that they “expect pressure to continue in the video business” as virtual MVPDs ramp up.

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  • DirecTV Now Subscribers Hit 1.8 Million

    AT&T’s skinny bundle DirecTV Now hit 1.8 million subscribers at the end of June, per AT&T’s Q2 ’18 earnings report, released yesterday. DirecTV Now added 342K subscribers in Q2 ’18, compared with 152K in Q2 ’18 and 312K in Q1 ’18. DirecTV Now’s gains more than offset the 286K traditional DirecTV subscribers lost in the quarter (almost double the 156K loss from a year ago), with U-verse also adding 24K (vs. a loss of 195K a year ago). Overall, AT&T ended the quarter with 25.449 million video subscribers compared with 25.172 million in Q2 ’17.

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  • VideoNuze Podcast #426: Magid’s Cord-Cutting Research; Sling TV Updates

    I’m pleased to present the 426th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    First up on this week’s podcast, we discuss Magid’s latest research showing another uptick in cord-cutting intent among pay-TV subscribers, especially for millennials. Even sports fans are now considering cutting the cord. Perhaps most surprising, cost is no longer the main motivator; it’s not watching enough TV to make it worth it.

    That’s indicative of more pay-TV subscribers shifting their viewership to SVOD, and suggesting an opportunity for low-cost virtual pay-TV operators to gain momentum. One such player, Sling TV just made some interesting updates to its service this week which we discuss.

    I think the Magid research is part of the reason why we need to revise how we talk about cord-cutting. Increasingly, I think an equally, if not more appealing, option for prospective cord-cutters will be downgrading to a skinny bundle, rather than dropping entirely. More on this on VideoNuze soon.


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  • How “Skinny” Bundles Are Enabling a New OTT Linear TV Ad Opportunity [VIDEO]

    Skinny bundles are a hot topic in the industry as a bona fide alternative to prospective cord-cutters. One of the big benefits of skinny bundles is that they rejuvenate linear TV viewing in the living room, which can be a potentially enormous new source of targetable TV ad inventory.

    At our recent VideoNuze Online Video Ad Summit, we dug into this unfolding opportunity on a session with Brendan Canning (SVP and Head of Distribution, Stadium), Samantha Casagrande (Associate Director, Media Investment, Wieden + Kennedy), Andy Hammond (VP, Sales, fuboTV), which I moderated.

    Watch the session video now!

     
  • VideoNuze Podcast #425: AT&T Disrupts TV, World Cup Streaming Surges and More

    I’m pleased to present the 425th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    On this week’s podcast we cover a number of topics, starting with AT&T’s newest skinny bundle offering, WatchTV, which is bonus feature for subscribers to 2 of its new unlimited wireless plans. Colin and discuss the implications for the industry as AT&T reshapes consumers’ perceptions of pay-TV as a standalone premium service to a supporting feature in their wireless plan.

    We then turn to the World Cup, which is setting streaming records, even in the early matches. Colin shares the data and his personal experiences on quality, which have been very positive.

    Next, we touch on Apple’s latest high-profile content deals, with Oprah Winfrey and Sesame Workshop. Apple’s continuing to spend through the $1 billion it allocated, but we still wonder, how is this A-list content going to be distributed and monetized? Finally we review Instagram’s new long-form video service, IGTV, which was announced this week. We’re both excited about its prospects, particularly relative to Facebook’s other video initiatives, which have been all over the board.

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  • AT&T’s New Skinny Bundle Continues Its Disruptive Video Strategy

    AT&T officially unveiled its “WatchTV” skinny bundle today, following its preliminary tease of it in late April. Though WatchTV only has 31 networks at launch, it’s a very respectable entertainment-focused group, including the newly acquired Time Warner networks, AMC, A&E, Food and HGTV, with select Viacom networks (BET, Comedy Central, etc) coming soon.   

    But the specifics of what’s included are a tangential; what’s most important to understand with WatchTV is that it is the latest, and most aggressive, salvo by AT&T to use “video as bait” to support its wireless business. This strategy has significant long-term implications for the TV industry.

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  • VideoNuze Podcast #422: Exploring Hulu With Live TV’s 800K Subscriber Count

    I’m pleased to present the 422nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    This week Hulu’s CEO Randy Freer said in a CNBC interview that the company had “surpassed 800,000 subscribers” for its Hulu with Live TV service. It was the first time Hulu has revealed subscribers for its skinny bundle service which was launched just over a year ago.

    Colin and I are both impressed with the number, which represents 4% of its overall 20 million subscribers and probably puts it in fourth place in the category behind YouTube TV, Sling TV and DirecTV Now. Based on rough calculations, the Live TV service is likely generating almost $300 million in run-rate revenue now (whether its profitable is another question). That’s a strong start and more evidence Hulu has found a winning formula.

    Back on the SVOD service, we also discuss James Murdoch’s comment that about half of Hulu’s subscribers are taking the ad-supported option, (which Hulu said is actually more than 60%), but that would still be down from “the vast majority” which Hulu has consistently said in the past. Finally, we discuss the pros and cons of either Comcast or Disney taking control of Hulu due to the battle over 21st Century Fox assets. I wrote last week Comcast would benefit more.

    (Note, Hulu’s VP of Ad Sales Jim Keller will be on Colin’s panel “Connected TVs' Ad-Supported Future” at the VideoNuze Online Video Ad Summit on June 12th)

    Listen in to learn more!


     
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  • Why Comcast Should Take Control of Hulu

    Yesterday’s confirmation by Comcast that it is preparing an all-cash bid for Fox assets that would top Disney’s current bid came as no surprise. All that remains now for this corporate drama to go into overdrive is the decision on June 12th in the AT&T-Time Warner court case. If that deal is approved (which I believe is likely), Comcast is expected to formalize its Fox offer almost immediately. As these machinations continue, one looming question is what will become of Hulu?

    Hulu is of course a joint venture among Disney, Fox and Comcast (via its NBCUniversal acquisition), with each company owning 30% and Time Warner owning 10% (that’s rounding as Hulu employees also own a piece). That means the ultimate owner of the Fox assets - Disney or Comcast - will also become a majority owner of Hulu. It seems to me Hulu would be more valuable to Comcast, and indeed Comcast should be angling to try to figure out how to take control of Hulu regardless of how the larger Fox deal sorts out. Why?

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  • Traditional Pay-TV Subscriber Loss in Q1 Slows to 305K

    Traditional pay-TV operators accounting for around 95% of the market lost 305K subscribers in Q1 ’18, compared to 515K in Q1 ’17 according to Leichtman Research Group. The loss is net of 405K Sling TV and DirecTV Now skinny bundle subscribers gained in the quarter by Dish and DirecTV, compared to 265K added in Q1 ’17. Backing out the skinny bundle gains, traditional pay-TV lost 710K subscribers in Q1 ’18 vs. a loss of 710K in Q1 ’17.

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  • VideoNuze Podcast #418: Why Skinny Bundles Could Succeed

    I’m pleased to present the 418th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    Earlier this week, I wrote how I’ve been rethinking the opportunity for skinny bundles. I’ve been skeptical, but I’m becoming more optimistic because of expanded local broadcast TV carriage (YouTube TV in particular has invested very heavily), parent companies’ larger strategic priorities that are motivating them to subsidize skinny bundles’ lack of profitability and the ongoing value of linear TV if priced appropriately.

    On this week’s podcast, Colin and I explore all of these reasons in further depth. Skinny bundles are also benefiting from the quality of SVOD’s programming, which makes second-tier cable networks not included in skinny bundles less missed - a dynamic that could have broad consequences for pay-TV in general. We also discuss how Hulu with Live TV could be one to watch among skinny bundles as it benefits from the 20 million plus SVOD subscriber base.

    It’s still extremely early days for skinny bundles but the likelihood of their success is definitely improving.

    Listen in to learn more!


     
    Click here to listen to the podcast (24 minutes, 15 seconds)


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