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Analysis for 'Telcos'

  • VideoNuze Podcast #420: AT&T Pursues All Video Price Points; Amazon Dominates SVOD Distribution

    I’m pleased to present the 420th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    AT&T is planning to deliver its DirecTV satellite services over broadband at a reduced cost, further demonstrating the company’s commitment to OTT video delivery. With the DirecTV broadband service and its upcoming skinnier bundle “AT&T Watch” for $15/mo, AT&T is pursuing every price point for its different video services. Colin and I discuss why all this helps AT&T with its wireless bundling strategy.

    We then transition to new TDG research showing Amazon Channels is driving 55% of all direct-to-consumer streaming subscriptions including 70% and 72% for Starz and Showtime respectively. We’ve both been big fans of Channels since it launched as the Streaming Partners Program in late 2015, and it appears to be paying off really well.

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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 #417: Exploring AT&T’s and Comcast’s Divergent Video Strategies

    I’m pleased to present the 417th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. We’re grateful to this week’s podcast sponsor, Ad-ID, which is the standard for identifying advertising assets. Ad-ID has recently released a new paper with examples of the value and importance of using a standard identifier. Learn more here.

    On this week’s podcast, Colin and I analyze AT&T’s and Comcast’s video subscriber results for Q1 ’18, which were announced this week. AT&T has aggressively promoted its skinny bundle DirecTV Now, which gained 312K subscribers in Q1, more than offsetting the 188K loss for traditional DirecTV.

    By contrast, because Comcast doesn’t have a meaningful skinny bundle (Xfinity Instant TV is mainly a broadcast TV package that also hasn’t been heavily promoted), it felt the full impact of losing 93K residential video subscribers.

    While the underlying economics of skinny bundles remain questionable, AT&T has settled on a strategy of using their low-cost package to support their core wireless business. Multichannel pay-TV is a business that has contracting margins and accelerating subscriber defections. Colin and I speculate on whether Comcast should similarly embrace skinny bundles to support their core broadband business and have a meaningful alternative to provide to prospective cord-cutters.

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  • Upcoming AT&T Watch Skinny Bundle Will Take “Video as Bait” Strategy to New Level

    Almost a year ago, in a post titled “Video is Quickly Becoming Bait for Wireless Carriers to Lure and Retain Subscribers,” I detailed how big carriers were aggressively discounting and bundling various video services in order to support their wireless businesses.

    Last Thursday we got a glimpse of how the “video as bait” strategy is soon going to be taken to a new level. In court testimony concerning AT&T’s proposed acquisition of Time Warner, AT&T’s CEO Randall Stephenson said that in the coming weeks the company would launch a $15/month sports-free skinny bundle dubbed “AT&T Watch.” As CNN reported, the kicker is that for AT&T’s unlimited wireless subscribers, the service would be free. As such, it is the most dramatic example yet of how wireless companies see video as little more than a bonus feature to drive their core businesses.

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  • VideoNuze Podcast #411: TiVo Data Explains Traditional Pay-TV’s Downward Spiral

    I’m pleased to present the 411th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

    This week Colin and I share details from TiVo’s new Q4 ’17 Online Video & Pay-TV Trends report (download here), which shows how the high cost of multichannel TV subscriptions is leading to a record level of cord-cutting. The TiVo report also shows how SVOD has gained loyalty and that broadcast TV remains critical for many viewers.

    All of this adds up to a dynamic which Colin and I only see firming up further: consumers becoming more proactive through more cord-cutting and cobbling together SVOD subscriptions with low cost, “good enough” skinny bundles and/or antennas. Skinny bundles like YouTube TV, which includes broadcast will become market leaders, while those that don’t (or don’t offer a solution like Sling TV does) will be challenged. Absent a new catalyst, we see this as the state of play in the TV industry for the foreseeable future.

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  • Research: Pay-TV’s High Prices Continue Alienating Subscribers

    Cord-cutting is accelerating, and there’s a simple, unsurprising reason why: pay-TV service is just too expensive. For the fifth quarter in a row, that’s the finding of TiVo’s Online Video & Pay-TV Trends Report. In Q4 ’17, in response to the question “What factors influenced you to cancel your cable/satellite service?” the price/too expensive answer grew by 6.6 percentage points vs. Q4 ’16 to 86.7%, its highest level ever.

    Price/too expensive is by far the most important reason, with the second reason, “I use an Internet streaming service” at 39.7%, actually down 8.6 percentage points vs. Q4 ’16. Next was “I use an antenna to get the basic channels on my TV, at 23%, down 4.2 percentage points vs. Q4 ’16.

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  • Cord-Cutting Accelerates, Top Pay-TV Operators Lost Nearly 1.5 Million Subscribers in 2017

    The top 13 pay-TV operators in the U.S., which represent around 95% of the total market, lost nearly 1.5 million subscribers in 2017, double 2016’s loss of 760K subscribers, according to Leichtman Research Group. However, the loss would balloon to nearly 3.1 million subscribers after deducting the 1.6 million skinny bundle or “vMVPD” subscribers that were added in 2017. The 3.1 million multichannel subscriber loss is about 62% higher than the 1.9 million lost in 2016. The top 13 pay-TV operators ended 2017 with approximately 92.2 million subscribers.

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  • Comcast Technology Solutions - full banner - 3-28-18
  • VideoNuze Podcast #400: The Top 10 Online Video Stories of 2017

    I'm pleased to present the 400th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    In this week’s podcast Colin and I discuss our top 10 online video stories of 2017. It’s been another incredibly busy year with tons of industry innovation and progress. As always, it has been a lot of fun to analyze all of this and report on it. Let us know what you think of our choices, whether you agree or disagree!

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    Unless there’s some big news, this will be my last post for 2017.

    Happy Holidays to all!

     
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  • VideoNuze Podcast #395: Will the AT&T - Time Warner Deal Get Approved?

    I’m pleased to present the 395th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Many thanks to Brightcove, this week’s podcast sponsor. Brightcove will be presenting insights on server-side ad insertion at our SHIFT Programmatic conference on Nov. 29th.

    The Justice Department’s Antitrust Division has reportedly put 2 unpalatable options in front of AT&T to gain approval for its proposed acquisition of Time Warner: divest Turner (including CNN) or divest DirecTV, which was only acquired 2 years ago.

    On today’s podcast, Colin and I discuss how incongruous it feels for the government to assert AT&T will be gaining too much market power by acquiring Time Warner. To the contrary, Colin and I believe the market power of all incumbent media and telecom companies has dramatically decreased as big digital players like Google, Amazon, Apple, Netflix, Facebook, etc. have become leaders in advanced advertising and subscription business models.

    Recognizing the massive disruptions, including accelerating cord-cutting, established providers are scrambling to reinvent themselves, with Disney’s decision to go direct to consumer with its most premium content the best example. We discuss how government limits on the ways established companies can reposition themselves for this era would be a major limitation.

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  • Antitrust Head Delrahim in Hot Seat on AT&T - Time Warner Deal

    No doubt you’ve already heard about the remarkable turn of events in the saga of AT&T’s acquisition of Time Warner. As reported by multiple news outlets yesterday, the Justice Department’s Antitrust division is apparently telling AT&T it would have to commit to either divesting Turner (including CNN) or DirecTV in order to gain regulatory approval for the deal. Both are totally unpalatable to AT&T.

    All of this puts Makan Delrahim, the recently confirmed head of the Antitrust division in the hot seat. Assuming he decides to block the deal and AT&T then sues the government, it will fall to Delrahim to make the government’s case that absent any divestitures, the deal would be anti-competitive. The bar is even higher for Delrahim because when he was a professor at Pepperdine, he said in a telephone interview with Canada’s BNN that he did not see the deal as a “major antitrust problem.” He explained that any Antitrust objection must be based on a belief that the deal would “substantially lessen competition” by “very defined legal and econometric standards” and that the burden of proof is on the government to prove this in federal court.

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  • Research: Pay-TV Satisfaction is Up, But Price Remains Achilles Heel

    TiVo has released its Q2 ’17 Video Trends Report, finding among other things that satisfaction with the value of pay-TV among subscribers noticeably increased over the prior quarter even as price remains a major concern, and a driver of cord-cutting.

    TiVo found that 31.2% of subscribers said they’re “very satisfied” with the value of their pay-TV service, up 7.5 percentage points vs. Q1 ’17 and 11.6 percentage points over the past 2 years. Another 52.9% of subscribers said they’re “satisfied,” roughly flat with Q1 ’17. Respondents saying they’re “unsatisfied” dropped 6.9 percentage points vs. the prior quarter to 15.9%.

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  • VideoNuze Podcast #386: Roku’s IPO, T-Mobile-Netflix Promo, Hulu-Spotify Bundle, Newsy to Cable TV

    I’m pleased to present the 386th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    After taking a couple weeks off from the podcast, Colin and I are back, and today we discuss 4 different industry stories that have caught our attention. First up, just before Labor Day, Roku filed its S-1 IPO document, sharing financial details for the first time. Colin and I are both struck by the strength of Roku’s “platform revenues” and believe the company’s strategy of innovating with low-priced streaming devices to gain market share has opened up many revenue options (though Colin’s a bit worried about Roku losing its valuable neutrality position in the wake of launching the Roku Channel this week).

    We then move on to T-Mobile’s plan to give away Netflix to its unlimited family plan subscribers. It’s the latest “video as bait” play by a wireless carrier, and we both see this trend accelerating. Another interesting bundle play this week was the $5/mo promotion from Hulu and Spotify. We discuss its potential to extend beyond the initial college student target.

    Finally, Colin and I were both intrigued by a plan unveiled by Newsy, a popular millennial-focused news app, to create a linear TV channel by taking over Retirement Living TV’s pay-TV subscribers. It’s a relatively unusual move given most TV networks are launching OTT apps these days.

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  • VideoNuze Podcast #384: Rounding Up the Week’s Top News

    I’m pleased to present the 384th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    On today’s podcast, Colin and I first discuss Q2 ’17 pay-TV video subscriber results. Skinny bundles played a big part in offsetting accelerating losses in traditional multichannel services. Will this continue and if so what are the implications?

    We then dig into the DVD market’s decline which was further accelerated this week when Amazon decided to close down its LOVEFiLM DVD-by-mail business in several European countries. Colin notes that Netflix’s DVD business has had a huge drop-off also and he speculates whether it too might get cut loose. On the bright side, Redbox re-upped its deal with Lionsgate, showing that DVDs still have a bit of life left.

    Finally, Apple was back in the news this week, reportedly allocating $1 billion for original TV shows. We speculate on whether this will be successful and what challenges Apple will face.

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  • VideoNuze Podcast #381: Inside Comcast's and AT&T's Q2 Video Results and the Role of Skinny Bundles

    I’m pleased to present the 381st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week we discuss both Comcast’s and AT&T’s Q2 ’17 video subscriber results, which were dramatically different, and what we see as the implications.

    First, Comcast, lost 34K residential video subs in Q2 ’17, as compared with losing just 4K in Q2 ’16.  Colin and I differ in our interpretation, with him more concerned that Comcast’s streak with X1 has likely run its course. I’m more sanguine because as I look more broadly, over the past 4 quarters, Comcast has managed to turn in exceptional performance in the face of massive cord-cutting headwinds.

    By contrast, AT&T’s core video businesses - Uverse and DirecTV - have been hemorrhaging subscribers over the past year, and Q2 highlights how deeply discounted and bundled DirecTV Now is the only bright spot in video for AT&T.  But as I explain, the company’s willingness to all but give away its skinny bundle to preserve its wireless business has potentially profound long-term consequences for the entire pay-TV industry, with Amazon increasingly well-positioned to be a big winner.

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  • DirecTV Now is Quickly Becoming Pivotal to AT&T’s Wireless Business

    With AT&T reporting its Q2 ’17 results yesterday, the pivotal role that the company’s DirecTV Now skinny bundle is playing in sustaining its wireless business is becoming increasingly clear. It has never been any great secret that DirecTV Now, which now has approximately 500K subscribers, was meant to be bundled with AT&T’s wireless service, but the speed with which it is already contributing to the wireless business is quite noteworthy.

    In supporting slides and on the earnings call, AT&T CFO John Stephens repeatedly called out the role DTV generally and DTV Now specifically are playing, particularly in reducing post-paid wireless churn (the type of wireless service most readers of this post have). At .79%, Q2 marked the lowest-ever quarter of post-paid churn.  More broadly, post-paid churn is down 25 basis points since the close of DirecTV deal.

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  • VideoNuze Podcast #371: Pay-TV Losses Are Being Driven By More Than Just Cord-Cutting

    I’m pleased to present the 371st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    The persistent media narrative around pay-TV cord-cutting has gained a lot of traction in the past few weeks as it became clear that the industry lost 700,000-800,000 traditional multichannel video subscribers in Q1 ’17, the first time a first quarter loss has ever occurred.

    But pay-TV’s losses are attributable to key factors beyond cord-cutting as our guest this week, Bruce Leichtman, president of Leichtman Research Group, and a premier industry analyst, explains. Bruce reveals why the Q1 loss in fact has more to do with specific pay-TV providers (primarily Dish Network) cutting back on new subscriber promotions. This reduction in “top of the funnel” additions ultimately flows into the net subscriber numbers.

    While cord-cutting is indeed ticking up, Bruce walks us through his analysis of why the industry’s dynamics are more nuanced than most media reports suggest. We also dig into the role of connected TVs, the prospects for skinny bundles, SVOD’s impact and how Comcast in particular is bucking industry trends using X1. Bruce also discusses the significance of there now being more broadband subscribers than video subscribers in the U.S.

    (Apologies in advance, the recording is a bit scratchy as we were in 3 locations and had some WiFi challenges.)

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  • HBO to End Amazon Content Relationship As It Repositions for Future Under AT&T

    On yesterday’s Time Warner Q1 ’17 earnings call, HBO’s CEO Richard Plepler said that the company’s content licensing deal with Amazon would not be renewed and therefore would expire at the end of 2018. The deal was originally announced in April, 2014 and allowed Amazon to include iconic series like “The Sopranos,” “The Wire,” “Deadwood” and others in its Prime Video service.

    Although Plepler cited “an acceleration in our digital business” as the reason for the decision, I believe that the more important driver at work is a repositioning of how the immensely valuable HBO will be used when AT&T’s acquisition of HBO parent Time Warner occurs later this year (assuming regulatory approval is granted, which I think is very likely).

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  • VideoNuze Podcast #361: Pay-TV’s Woes Illustrated in TiVo’s Research

    I’m pleased to present the 361st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    This week Colin and I discuss TiVo’s 16th quarterly Video Trends Report, which we both covered this week (here and here). We agree that the pay-TV industry has painted itself into a high-cost corner. The consequences of this are increases in cord-cutting, cord-shaving and adoption/use of SVOD, reduction in perception of per channel values and budding interest in new skinny bundles.

    All of this is bad news for the industry and the report illustrates the specifics of each of these trends.

    The report is available as a complimentary download here.

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  • Video is Quickly Becoming Bait For Wireless Carriers to Lure and Retain Subscribers

    There is an unmistakable trend taking hold in the wireless industry: video is quickly becoming bait for big carriers to lure and retain subscribers. All 4 of the biggest U.S. carriers have not only launched unlimited data plans, which are being explicitly promoted for video viewing, but in addition 3 of the 4 (T-Mobile, AT&T and Verizon) are also tying in aggressive discounts on video services. As I wrote recently, all of this carrier activity will drive more widespread mobile video use.

    The start of the trend can clearly be traced to November, 2015 when T-Mobile launched its Binge On program, which now allows users to watch 120+ video services without impacting the user’s data plan. T-Mobile upped the ante in late 2016 by offering AT&T subscribers who switched to T-Mobile a full year of DirecTV Now for free (a $420 value). In January, T-Mobile further tweaked AT&T by adding a free year of Hulu for these subscribers because of the launch problems DirecTV Now experienced.

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  • Verizon’s New Unlimited Data Plan Further Boosts Mobile Video

    Another day, another move by a major wireless carrier that further boosts mobile video. Yesterday, Verizon announced that it is offering unlimited data plans, for $80/month for the first line and $45/month for subsequent lines. It’s the first time Verizon has offered an unlimited data option since 2011 and is yet another sign of how aggressively wireless carriers are embracing mobile video as a key value proposition, in turn pressuring their business model of incremental payments for data usage.

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