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Cord-Nevers Still Not Interested, Even With “Skinny Bundles”

Phillip Dampier June 14, 2017 Competition, Consumer News, Online Video 3 Comments

Consumers who refuse to pay for cable television today still won’t pay for it tomorrow, even if they are offered a slimmed-down “skinny bundle” of cable networks for less money.

Sanford Bernstein media analyst Todd Juenger continued a series of focus groups with consumers to find if alternatives to cable television are attractive to consumers. The under-40 sample mixed cord-cutters and current cable and satellite customers and presented them with a range of recently available options from Sling, DirecTVNow and YouTube TV and asked if they would subscribe.

Once again, Juenger discovered the group most likely to subscribe to a cable-TV alternative already had pay television and often paid for the top-tier of service. So far, many of those customers are sampling different services but have not taken the last step of dropping their existing cable television package.

Multichannel News reports most won’t disconnect because of the lack of DVR service from most cable-TV alternatives. Until robust cloud-based DVR service is widely available and not hobbled by a lack of fast-forwarding functionality, new streaming services like DirecTVNow probably will never replace cable television.

Cable-nevers — mostly younger consumers that have never paid for cable television, still don’t seem to be willing to pay for online alternatives either. Most cited the fact they watched individual shows, not channels, and most “skinny bundles” invariably lacked certain networks with the programming they wanted to watch. Many would prefer to subscribe to television shows, not networks.

Cable TV pricing, widely slammed by many customers as too high, didn’t seem to matter as much to those participating in the series of focus groups. When asked what cable networks they would be willing to pay $5 a month each to watch, ESPN was rated on top, followed by Food Network, FX, HGTV, Logo, NBCSN, Syfy and VH1 — many carrying niche shows and original content not available elsewhere. If all eight networks were bundled together, that would cost $40, considerably more than the per channel price of much larger packages.

While older cable subscribers tend to watch programming from the same 6-10 cable networks, younger viewers seek out specific shows, and may not be able to identify what cable networks air them. They also watch on-demand more than older viewers.

Fox Spars With Its Own Affiliates, Quietly Launching Streaming Network Feed on Hulu

Phillip Dampier June 12, 2017 Competition, Consumer News, Online Video 1 Comment

Subscribers to Hulu’s live-streaming TV service last week discovered live Fox network programming was available on the service whether a local Fox affiliate agreed to stream its programming to viewers or not.

The network quietly launched a new national 24-hour streaming feed of Fox Network shows filled out with programming from other Fox-owned networks in more than 70 markets where its affiliates have yet to sign an agreement to stream local stations.

For now, the national Fox Network feed is only available over Hulu’s live TV service, part-owned by 21st Century Fox. But sources told the Wall Street Journal the network intends to launch it on other streaming platforms in the near future (subscription required to read linked story).

The feed offers the full Fox Network schedule. At times when local stations normally carry syndicated programming, infomercials, or local news, the national Fox feed airs shows from other Fox-owned cable networks including National Geographic, Fox News Channel, Fox Business News, and content from Fox’s enormous library of programming offered by 21st Century Fox Television Studio.

The move has angered Fox’s affiliates, who are angling to strike their own more lucrative carriage deals for streaming services. Fox affiliates complain Fox’s terms for local station participation on Hulu’s streaming platform are inferior to the compensation offered to affiliates of rival networks, often by more than 50%.

Fox set the terms allowing the launch of the feed sometime ago as part of their affiliate renewal contract. Fox affiliates cannot compel the network to switch the feed off, but in markets where local stations do manage to sign deals with streaming services, the local station will replace the national feed.

The announcement is bad news for Sinclair Broadcast Group, the largest local station owner in the country. Sinclair has yet to sign a contract with Hulu to allow carriage of its owned and operated Fox-affiliates, so where a local Sinclair Fox affiliate operates, streaming services will carry the national Fox feed instead.

Viewers will be able to watch all Fox Network shows, including whatever NFL game Fox’s national feed chooses to carry. But missing from the lineup will be local news and other programming.

Viacom, Booted Off Some Basic TV Tiers, Plans Own $10-20 Non-Sports TV Package

Viacom, which owns cable networks including Comedy Central, Nickelodeon, MTV, BET, and TV Land, will launch a cheap non-sports bundle of entertainment cable networks viewable online for $10-20 a month this year.

Viacom has lost basic cable viewers at an accelerating rate as cable operators drop their networks or repackage them in more expensive basic tiers as Viacom raises wholesale rates cable companies pay to carry the channels.

Viacom CEO Bob Bakish talked about the new service this morning at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston. Bakish said most of the current “skinny cable TV” bundles were priced at around $40 a month, which is too expensive to attract “cord-never millennials” that frequently don’t subscribe to cable television.

“The transformational opportunity is to bring in a new entry segment at a much lower price point,” Bakish said. The cable industry needs “a path to bring in someone who wants high-quality entertainment” but has no interest in expensive sports networks.

That is why Bakish wants to create a cheap entertainment-oriented bundle of networks that omits sports-related channels. But Bakish has also repeatedly stressed he has no intention of giving consumers a comprehensive online alternative to traditional cable TV, telling investors Viacom is “not creating inexpensive opportunities to serve as an alternative.”

Bloomberg News reported Viacom was talking to Discovery and AMC Networks about participating in the new service. The only complication may be a backlash from sports programmers like Walt Disney’s ESPN and 21st Century Fox, Inc., which have contracts requiring providers to include the sports networks in their most popular bundles. Some contracts even limit how many customers are permitted to sign up for a sports-free TV package, according to Michael Nathanson, an analyst at MoffettNathanson LLC.

“It’s meant to dissuade distributors from doing something like this,” Nathanson told Bloomberg. “The issue is how many subscribers they can have before the legal questions appear.”

Bakish may also be trying to remind cable and satellite companies that Viacom can always go direct-to-consumers if operators banish Viacom’s networks off the cable dial or move them to a more expensive tier, although there is no guarantee the new service will bundle all of Viacom’s networks.

Viacom has seen its relationships with cable and satellite providers deteriorate over the last few years under prior management. Some smaller cable companies including Cable One dropped Viacom channels from their cable systems over cost issues in 2014, and many more subscribers have seen Viacom networks temporarily dropped as a result of contract renewal disputes. Bakish has made repairing relations with cable and satellite customers a priority since taking over as CEO in December, but he still has a way to go.

Recently, Charter Communications moved Viacom networks out of its Select basic cable TV package and moved them to its most expensive Gold package for new customers. With only a minority of customers signed up for Gold service, Viacom networks could eventually lose millions of viewers as Time Warner Cable and Bright House customers adopt Spectrum packages in the next few years. If those customers do not subscribe to Gold or refuse to pay extra for a “digipak” of Gold’s basic channels without the premium networks, they will lose access to Viacom channels when they change TV plans.

That issue also concerns Wall Street analysts who believe it could eventually erode Viacom’s viewer base. Bakish made certain to tell investors Viacom was not surrendering to Charter’s “re-tiering.”

“We firmly don’t believe they have the rights to do that,” Bakish said. “We’ve been in discussions with them. We’ve got to get that resolved.”

If it is resolved, those networks may again be available to Select TV customers.

Viacom, AMC, and Discovery are partnering up to offer a $10-20 entertainment-only package on streaming basic cable networks for consumers, as this Bloomberg News story reports. (2:58)

CBS All Access Offers Showtime Add-On for Existing Customers

Phillip Dampier May 11, 2017 Competition, Consumer News, Online Video 1 Comment

CBS is now offering CBS All Access and Showtime’s standalone service customers a bundled package of both services for up to $2 off.

Starting now, current customers who visit their account page on either service will have the option of adding either CBS All Access or Showtime to their account. CBS will expand the service to new subscribers at a later point, so if you have neither service today, you cannot get this offer yet.

Prices reflect a bundling discount. Showtime itself normally costs $10.99/month. CBS All Access costs $5.99 a month with commercials, $9.99 without.

  • Showtime with CBS All Access Limited Commercial Plan: $14.99 (save $1)
  • Showtime with CBS All Access No Commercial Plan: $18.99 (save $2)

CBS CEO Les Moonves has promised a bundled offer since last year, and now it has arrived.

Once subscribed, customers can access both services on desktop computers, mobile devices, tablets, and streaming video boxes like Roku.

One benefit of CBS All Access is the option of live-streaming your local CBS station, available in about 90% of U.S. households. CBS is taking steps to broaden online distribution of CBS affiliated stations on other streaming platforms as well, which could make CBS the first network to offer wide access to local stations on emerging live streaming platforms like Hulu TV, YouTube TV, and DirecTV Now.

CBS claims about 1.65 million customers subscribe to Showtime’s online streaming service and almost the same number subscribe to CBS’ All Access Pass. In comparison, HBO Now, available on a standalone basis, has around two million subscribers.

Hulu’s Streaming Live TV Launches; $39.99 for Hulu, 50 Live TV Channels + Cloud DVR Service

Phillip Dampier May 3, 2017 Competition, Consumer News, Online Video, Video 2 Comments

The long anticipated wait for Hulu’s live streaming cable-TV replacement is over with today’s soft launch of Hulu with Live TV, offering 50 cable networks and local affiliates of ABC, CBS, NBC, and FOX in select larger cities.

“Hulu can now be a viewer’s primary source of television,” said Hulu CEO Mike Hopkins. “It’s a natural extension of our business, and an exciting new chapter for Hulu.”

The new service will bundle Hulu’s live/linear TV service with its well-known on-demand package of movies and television shows. The service represents a direct challenge to cable television subscriptions and for Hulu’s owners — Disney, 21st Century Fox, Comcast’s NBCUniversal and Time Warner, Inc., is the first major industry effort to keep subscription fees closer to home, and cuts out the cable middleman.

The lineup includes many, but not all, popular cable networks. There are very significant gaps — notably Viacom networks Hulu says it has no plans to add (Nickelodeon, Comedy Central, MTV). Also missing: AMC, Discovery Networks, HBO/Cinemax and Starz. Showtime is available for $8.99 a month.

The lineup:

Fox
Fox Local Station (New York, Los Angeles, San Francisco, Philadelphia and Chicago)
Big Ten Network
Fox Business Network
Fox News Channel
Fox regional sports networks
Fox Sports 1
Fox Sports 2
FX
FXX
FXM
National Geographic Channel
National Geographic Wild

Disney
ABC Local Station (New York, Los Angeles, San Francisco, Philadelphia and Chicago)
ESPN
ESPN2
ESPNU
ESPNEWS
ESPN-SEC Network
Freeform
Disney Channel
Disney XD
Disney Junior

Comcast/NBCUniversal
NBC Local Station (New York, Los Angeles, San Francisco, Philadelphia and Chicago)
Telemundo Local Station (New York, Los Angeles, San Francisco, Philadelphia and Chicago)
Comcast RSNs
NECN
USA Network
Bravo
E!
Syfy
MSNBC
CNBC
NBCSN
Golf Channel
Chiller
Oxygen Network
Sprout

A+E Networks
A&E
History
Lifetime
Viceland
Lifetime Movie Network (LMN)
FYI

Scripps Networks Interactive
Food Network
HGTV
Travel Channel

Turner Broadcasting
CNN
HLN
CNN International
TBS
TNT
TruTV
TCM
Turner Classic Movies
Cartoon Network & Adult Swim
Boomerang

CBS
CBS Local Station (New York, Los Angeles, San Francisco, Philadelphia and Chicago)
CBS Sports Network
POP
Showtime ($8.99 per month extra)

(Broadcast stations may be available in certain other cities, but not all network affiliates are included.)

Hulu with Live TV is available on Microsoft’s Xbox One, Apple TV (fourth generation), iOS and Android mobile devices, and Google’s Chromecast. Future support for Roku, Amazon’s Fire TV and Fire TV Stick and Samsung Smart TVs will come later. Oddly, desktop viewing on a Mac or PC is not currently supported.

The new service joins an increasingly crowded marketplace of online cable television replacements, including Dish’s pioneering Sling TV, Sony’s game console-platform PlayStation Vue, AT&T’s DirecTV Now, and YouTube TV — the newest before today.

Hulu’s most formidable competitor in the streaming TV space will likely be AT&T’s DirecTV Now service, which offers a broader range of networks and has become popular for its promotional equipment offers. Hulu plans to counter AT&T with a marketing effort that highlights its existing on-demand service of more than 3,000 TV shows and movies is included with every subscription.

Hulu also comes bundled with its own limited cloud DVR storage service, which will record up to 50 hours of programming. But similar to Google’s YouTube TV, customers will not be able to skip the commercials that are included in the shows they record. In fact, advertisers will be able to dynamically change their advertising spots in recorded shows as long as the customer keeps them in their personal recordings library. Customers will need to upgrade to “Premium DVR” service ($14.99) to enable fast-forwarding through ads. The premium DVR add-on also includes 200 hours of storage, unlimited simultaneous recordings, and the ability to watch recorded shows outside of the home.

Customers signed up to the base package will be able to create up to six individual profiles for the household, which allows each user to track and “favorite” TV shows and movies they enjoy the most. The service will provide recommended shows based on each person’s viewing habits. The feature also allows each family member to choose their favorite sports teams and Hulu will automatically record any available game that includes a favorite team.

Base subscribers get up to two simultaneous streams of live and recorded content. An “Unlimited Screens” add-on ($14.99) removes the limit and allows unlimited home streams and up to three concurrent streams outside of the home. Customers who want both Premium DVR and Unlimited Screens can bundle both features together for $20 a month — a $10 savings.

An introduction to Hulu’s new interface and live TV option. (1:55)

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