VideoNuze Posts

I'm pleased to present the 266th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Colin starts this week's podcast by sharing his positive reactions to Vessel, the startup from former Hulu CEO Jason Kilar, which went live this week. Colin likes the mobile app a lot and thinks Vessel's promotion of a free year of service is a smart approach. In particular, Colin is bullish on Vessel's non-intrusive ad model.

However, Colin is less certain about Vessel's odds of success, noting that YouTube's response is a major wildcard. I agree and observe that while Vessel is very impressive, it's also a big test case for users' willingness-to-pay for first window access to content. There's a lot to like about Vessel, and ample reason to believe millennials will like the model, but only time will tell.

Speaking of YouTube, it's becoming increasingly apparent that Facebook is poised to become YouTube's main competitor in the long-run. As I wrote yesterday, this week at Facebook's F8 developer conference, the company unveiled key updates, geared especially for premium publishers, that will bring a lot more high-quality content onto the platform. Colin and I dig into each of these and also discuss a big remaining missing piece - pre-roll ads against videos posted on Facebook.

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At Facebook's F8 developer conference yesterday, the company announced a series of initiatives that, taken together, demonstrate it is positioned to be a very big player in video and YouTube's biggest competitor long-term. Following are the most important announcements and my take on their implications. I also note the key missing pieces that are almost certainly on Facebook's video roadmap.

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So-called "skinny bundles" of TV networks face long odds of success given the dispersion of actual TV viewership, cross-ownership of broadcast-cable TV networks by media conglomerates and underlying economic realities, according to a new analysis by MoffettNathanson.

The conclusions align with points I made in last Friday's podcast and previously, as I've asserted that the "Swiss cheese" channel lineups found in skinny bundles will lack broad appeal. This was a central finding from recent Bernstein research as well. Conversely, bulking up channel lineups with more TV networks (as Sony has done with its new PlayStation Vue service) eliminates the opportunity for a cost-savings value proposition that would resonate most with would-be cord-cutters or cord-nevers.

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The NFL announced yesterday that it plans to exclusively stream a single game next season, a week 7 matchup from London between the Buffalo Bills and the Jacksonville Jaguars. The October 25th game will still be televised in the 2 home markets, starting at 9:30am ET, but elsewhere it will only be available online (though the NFL hasn't yet signed a digital distribution partner).

Brian Rolapp, the NFL's EVP, Media, characterized the move as mainly an experiment, meant to impart as much learning as possible (he also maintained that TV is still the best distribution option). That sounds right to me, though how much can really be learned from streaming a single game is a bit unclear (e.g. advertiser interest? technical or delivery quality? audience size?).

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Today, a deviation from my typical VideoNuze post. Peering into my crystal ball, I foresee a slew of mainstream media articles about HBO Now coming as early as May, just a month following its launch. These articles in the NY Times, USA Today, WSJ, etc. will highlight individuals who have subscribed to HBO Now and how the service is impacting the pay-TV ecosystem.

Importantly, these articles will underscore how, despite HBO's assertion that HBO Now is targeted solely to broadband-only households and is supposed to be beneficial for pay-TV/broadband ISP partners, in reality the service has much broader consumer appeal and hurts HBO's traditional partners.

Below I'm sharing an example of such an article. In it you'll read about Kristin Holter, the Gehls and Bill Aiken. They are fictitious people, but are meant to be very representative of the kinds of people who will subscribe to HBO Now and how their decisions will affect the pay-TV industry.

Using the framework for assessing the potential of new OTT services that I shared last week, HBO Now scores by far the highest for me. Assuming it works as I expect it will, I continue to be very bullish on HBO Now, which I see as having far-ranging ripple effects, especially for non-sports fans. I recognize I'm going a little out on a limb with the below article, but I'm pretty convinced that directionally it's a great example of the type of media coverage HBO Now will be receiving very soon.

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Just A Month Old, HBO Now is Already Roiling the Pay-TV Industry

May 3, 2015

It wasn't supposed to be like this.

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I'm pleased to present the 265th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. There's been a lot of buzz this week about a WSJ report that Apple could at last be planning to enter the TV business, by offering a so-called "skinny" bundle of around 25 TV networks this Fall.

In today's podcast, Colin and I debate whether Apple can succeed with this approach. Colin is relatively sanguine, and believes that if Apple ties the TV service's launch to a new device, it could get a lot of traction. Colin sees Sling TV's skinny bundle as a model for Apple to follow.

I'm much more skeptical about the skinny approach, and despite Apple's formidable assets, I'm challenged to see how it works. My main issue is that by definition, skinny bundles result in a "Swiss cheese" channel lineup that is unsatisfying for many viewers (this was supported by Bernstein research I wrote about earlier this week). Another issue for Apple, which reportedly wants to include broadcast TV networks (which Sling doesn't include), is the near-certainty that it won't get full linear rights in all U.S. markets, undercutting the service's ubiquity.

At a minimum it will be fun to watch what Apple does, along with everyone else. Reminder, to help us all gauge these new OTT services' potential, check out the handy scoring framework I shared yesterday.

Listen in to learn more!

Click here for previous podcasts

Click here to add the podcast feed to your RSS reader.

The VideoNuze podcast is also available in iTunes...subscribe today!

As the pace of new OTT services has ramped up, I've been asked by a lot of industry colleagues and press which ones I believe have the most and least potential. It's a great question, and while I don't pretend to have a crystal ball, I certainly have my own opinions (as VideoNuze readers know!). But even as I've been sharing my thoughts, I've increasingly been asking myself - why is it, for example, that I'm more bullish about some (e.g. HBO Now), more skeptical about others (e.g. Sling TV) and more willing to be open-minded about still others (e.g. Apple's and Verizon's TV services)?

That's led me to think more rigorously about the criteria that I'm personally using to evaluate the potential of these new OTT services. It may be obvious, but when each of us makes judgments about a product or service, we're doing so against some implicit set of criteria. The challenge with all these OTT services is that a lot is still unknown about them and about consumers' reactions to them. On top of this the market is very dynamic. Nonetheless, I think it's still possible to create a set of criteria against which these new OTT services can be more explicitly evaluated (and re-evaluated as more information about them is known).

With that in mind, below I have shared 9 proposed criteria that I think are important in assessing these new (and existing) services' potential (there may be other criteria too!). By scoring each OTT service on a 1-5 scale against each criteria (i.e. 1 meaning "weak" or "not distinctive" and 5 meaning "strong" or "highly distinctive," their respective total scores emerge, forming a picture of potential winners and losers. If you're interested in using these criteria to do your own scoring, I have created a handy Google doc. Feel free to access, export to Excel, modify, etc. I'm interested in your results and comparing notes.

Here are my 9 proposed criteria:

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