Posts for 'YouTube TV'

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 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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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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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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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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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.

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VideoNuze readers know I’ve long been skeptical about the value proposition of virtual multichannel video programming distributors (“vMVPDs”) or “skinny bundles” as they’re commonly known. But as I touched on in last Friday’s podcast, based on some significant changes over the past year, I’m becoming more optimistic about skinny bundles’ prospects and their broader impact on pay-TV.

To take a step back, 3 main concerns have driven my skepticism about skinny bundles: (1) their incomplete channel lineups (the “Swiss cheese” challenge of too many holes, or missing TV networks) which reduces their appeal relative to pay-TV’s traditional multichannel lineups, (2) the dubious profitability of skinny bundles, especially given underlying programming costs, which raises the question of just how committed the big parent companies of skinny bundles are to them, and (3) viewers’ migration away from linear TV in favor of SVOD, which is driving up cord-cutting.

Here’s what’s changed:

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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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Major League Baseball is becoming a huge beneficiary of YouTube TV’s aggressive expansion plans. Under a new deal announced this morning, YouTube TV will be the “presenting sponsor” of the 2018 and 2019 World Series, the same groundbreaking role YouTube TV had in last Fall’s classic. That deal had many innovative aspects and introduced the YouTube TV brand and service to millions of viewers.

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YouTube TV, which launched less than a year ago and ended 2017 with around 300K subscribers, looks poised for strong growth in 2018. YouTube TV entered the crowded vMVPD or “skinny bundle” space with competitors Sling TV, DIrecTV Now, PS Vue, Hulu With Live TV and fuboTV. YouTube TV expanded from 5 initial markets to over 80 by the end of 2017, with plans to expand to over 100 soon, which it believes will cover 85% of the U.S. households.

It’s always hard to tell just how serious Google is about any new initiative given its massive resources and willingness to experiment and quickly shut something down. But YouTube TV is showing signs of being a serious initiative, not only because of its rapid expansion. Last fall, YouTube TV really hit my radar when it served as the presenting sponsor of the World Series, a deal which must have easily run into the 7 figures or more, raising huge new awareness and starting the redefinition of what the YouTube brand stands for.

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Virtual Multichannel Video Programming Distributors (“vMVPDs”) or “skinny bundles” have become a very hot topic in the video industry. Offering fewer TV networks and at a lower monthly price they’re seen as a way of keeping cord-cutters in the ecosystem while attracting cord-nevers. To learn more about the dynamics of vMVPDs, industry research firm (and long-time VideoNuze partner) The Diffusion Group recently completed a comprehensive study of vMVPD subscribers. I interviewed Michael Greeson, TDG’s president and director of research, to learn more.

VideoNuze: From a top-line perspective, what are the most important takeaways from your research?

Michael Greeson: First and foremost, while these services are successfully connecting with cord-cutters, they are entirely missing out with cord-nevers. Cord-cutters account for 54% of total vMVPD subs. The consumers were largely driven from legacy services by high service costs and paying having to pay for channels they don’t watch, and vMVPD services appear to better address these needs.

Cord-nevers, on the other hand, account for only 9% of vMVPD subs—clear evidence that these offerings are failing to resonate with younger buyers. And for good reason: cord-nevers are largely driven by a genuine lack of interest in multi-channel pay-TV services. They prefer a ‘build it yourself’ service that allows them to select and pay for only the channels they want, versus signing up for a bundle of channels.

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I’m pleased to present the 407th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

First up this week, Colin explains a very interesting analysis he has done indicating that Netflix viewership may be erasing up to $6 billion in TV ad inventory annually, which could be up to 8% of the market. Colin explains how all the binge-viewing that’s going on is taking time away from ad-supported TV, a trend that is only accelerating.

Part of the TV industry’s solution to this problem is to make ad-supported TV available more inexpensively through so-called “skinny bundles” or “vMVPDs.” One of these, YouTube TV, this week announced it added the Turner networks and plans to raise its rate by $5 per month. We discuss how YouTube TV appears to be gaining momentum and what Google’s long game likely is.

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YouTube TV announced it is adding 7 networks from Turner to its base package, including Adult Swim, Cartoon Network, CNN, TBS, TNT, truTV and Turner Classic Movies. YouTube TV will also add NBA TV and MLB Network to its base package soon, with NBA League Pass and MLB.TV available for additional fees. YouTube TV is also raising its rate by $5 to $40/month on March 13th, though all subscribers on board prior to then will be grandfathered at the current $35/month rate.

VideoNuze readers know I’ve been skeptical about how big the market opportunity is for skinny bundles like YouTube TV. A big challenge for skinny bundles has been striving to offer a sufficiently complete channel lineup to have broad appeal, while also keeping programming costs down, so consumer pricing is low enough to be a differentiator. At a more specific programming level, I’ve believed that skinny bundles had to carry the big 4 broadcasters in local markets given their still dominant viewership. Doing so is a tough, expensive slog.

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Happy New Year! I’m pleased to present the 401st edition of the VideoNuze podcast, and our first of 2018, with my weekly partner Colin Dixon of nScreenMedia.

As is our tradition, we discuss our top trends for the new year. 2017 was extremely busy for the industry and we expect 2018 to be no different. Among our top trends are wireless providers pushing deeper into video, YouTube TV starting to break out among skinny bundles, cord-cutting accelerating and Amazon pursuing many different opportunities to build its video business. We also discuss 4-5 additional trends to watch.

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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!

I’m pleased to present the 394th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Pay-TV operators are likely to have lost around a million video subscribers in Q3, while skinny bundles (or virtual MVPDs as Colin likes to call them) may have gained around 900K. In this week’s podcast Colin and I talk about these dynamics and what kinds of consumer behaviors are driving these changes.

For the skinny bundles, a big part of the growth is AT&T’s deep discounting of DirecTV Now to support its wireless service. Among others, YouTube TV, with its widespread broadcast coverage and major World Series promotion, is also poised to grow strongly.

But how much of skinny bundles’ gain is coming at pay-TV’s loss is still murky. No doubt some people are swapping, but I question how much they’re actually saving per month, and whether churn will ultimately be high as they realize certain networks aren’t included. Conversely, Colin sees these as “good enough” solutions when combined with SVOD services.

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Have you watched any of the first two games of the World Series? If you have, then you’ll undoubtedly agree that YouTube TV, the fledgling skinny bundle, is owning the games so far. Their branding is everywhere - behind home plate, on dugout walls and rails, on the outfield wall, on the end-of-inning scoreboard, on Fox’s “presented by” branding graphic, etc.

And all of that is on top of a 2-minute ad that played immediately prior to the first pitch in game 1, which cleverly started and ended with a live feed of the pre-game action on a mock living room TV (oddly, that 2 minute ad isn’t available in YouTube TV’s own YouTube channel). However a separate 30-second ad YouTube TV has also been running is (see below).

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I’m pleased to present the 390th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week, we discuss the impact of the “Star Trek: Discovery” launch on CBS All Access. CBS has said that All Access daily subscriber growth is up 200% over last year since the show’s launch. As Colin notes though, it’s hard to draw conclusions yet about how sustainable the additions will be or whether churn will spike. More originals are clearly needed to broaden the service’s appeal.

We then turn to the surprising news this week that YouTube TV will be the presenting sponsor of the 2017 World Series. Colin and I agree it’s really a sign of the times when a skinny bundle has stepped up this way. However, since Fox, the network broadcasting the games, isn’t even available yet on YouTube TV in half the top 50 U.S. markets, the sponsorship carries risks. Colin also notes that given YouTube TV’s programming costs, it is likely losing money for each new subscriber.

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YouTube TV, the skinny bundle launched earlier this year by YouTube, will be the presenting sponsor of the 2017 World Series on Fox. Take a moment to digest that: the iconic World Series won’t be presented by a beer or soda company, an automobile or truck manufacturer or a wireless carrier. Instead it will be a skinny bundle!

The sponsorship includes national TV spots, on-air call outs during each game, branding on MLB’s digital properties and social media accounts, plus in-stadium promotion and MLB players competing in postseason promotional events. YouTube creators will also produce behind-the-scenes content. And select fans will get VIP access at the games themselves. The value of the deal wasn’t disclosed, but surely runs to 7 or 8-figures.

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Here’s a Monday morning brain teaser to consider: is there any rhyme or reason for which TV networks are being included in skinny bundles like Sling TV, DirecTV Now, YouTube TV and soon Hulu? If there is, it’s hard to discern what it is. In fact, the composition of skinny bundles is getting more puzzling all the time.

For instance, last Friday, Hulu announced that it had reached a distribution deal with A+E Networks for its forthcoming skinny bundle. The deal followed previously announced ones with Hulu’s corporate parents Fox, Disney and Turner, plus CBS. But just a couple weeks ago, when YouTube TV was announced, it didn’t include A+E Networks (nor Turner, Viacom, Discovery, AMC or Scripps), though it did include CBS, Disney, Fox and NBCU.

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