The competitive dynamics among skinny bundles are still developing, but one thing is becoming increasingly clear: including a full array of broadcast TV channels in all of the biggest U.S. markets, and even many of the smaller ones, will be table stakes. It seems as if a week doesn’t pass these days without one of the five major skinny bundles announcing a new carriage deal for certain broadcast channels in a variety of local markets.
Based on the handy tracking doc that CNET has put together, it appears that Hulu with Live TV currently has the lead, with 200 local affiliates carried, with PlayStation Vue (which is priced more a multichannel bundle than a skinny one) next at 186, followed by YouTube TV and DirecTV Now (at 105 and 103 respectively). Sling TV, which has been in the market the longest, lags with just 36 affiliates carried (note these totals are as of August 17th, so maybe a bit out of date).
It’s no surprise that the biggest TV markets in the country are where skinny bundles are most focused on carrying broadcast channels. The top 5 markets in particular - New York, LA, Chicago, Philadelphia and Dallas-Ft. Worth - are all now pretty well covered by the major skinny bundles. On the doc, DirecTV Now does not get credit for having CBS, although it announced 3 weeks ago that it was adding local feeds in New York, LA, Chicago and other large metros.
Getting deals done between skinny bundles and the maze of affiliate owners looked like it was going to be daunting, but fortunately 3 of the 4 big networks (ABC, CBS and NBC) announced deals with their affiliate boards giving them the ability to bargain with skinny bundles and other digital outlets. Having a unified approach removes a lot of the friction which will no doubt drive more deals going forward.
Incorporating broadcast channels into skinny bundles is critical because, even with the fragmentation in viewing, broadcasters collectively still account for the largest share of audience and are sought out. This was underscored in research from Altman Vilandrie last year, which showed that the 4 major broadcast networks were at the top of the list of must haves by prospective skinny bundle subscribers.
The progress with broadcasters is a positive step for skinny bundles in addressing what I’ve called the “Swiss cheese” issue of having major programming holes in their lineups. Holes are still evident with regional sports networks, many popular cable TV networks, The CW Network, Latino programming and PBS stations which haven’t done any skinny bundle deals to my knowledge.
As VideoNuze readers know, I’ve been a skeptic on just how big the skinny bundle category will ultimately be. Many cord-cutters have long since accustomed themselves to a diet of SVOD choices only, and with programming quality improving all the time, a TV subscription will be even less important. On the other hand, AT&T’s willingness to offer DirecTV Now practically for nothing to lure and retain wireless subscribers could juice skinny bundle numbers for a while to come, especially if other telcos/cable operators mimic the approach.
To the extent skinny bundles do get traction, broadcast TV affiliates and networks look like important beneficiaries.