Archive for Pay TV

Does AVOD News Reveal a New Phase of SVOD?

My third post as a guest-blogger for the 2019 edition of the Media Insights & Engagement Conference (which is put on by knect365) asks if the recent flurry of AVOD news shows a new phase of SVOD.

“Hot on the heels of Nielsen’s announcement that its Total Ad Ratings product now includes OTT and mobile viewing comes NBC Universal’s announcement that it will be launching a new ad-supported OTT (AVOD) service in 2020. Other reports cover entry into the AVOD market of Amazon’s IMDb Freedive and Sinclair Broadcasting’s STIRR. On top of all this, Viacom acquired Pluto TV. What’s causing this mini-land rush on AVOD?”
Read the rest of the post at the knect365 website here.


MIE Conference logo
Attend the MIE conference, January 29-31 in Los Angeles to hear industry thought leaders on this topic and many others. Details about the conference can be found here.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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– Read my new book about TV, The Genius Box. Details here . 

Friday Finds: “Tales From the Tour Bus”

Friday Finds shares a piece of content I’ve recently discovered on broadcast, cable, or streaming TV.

Today’s find: Mike Judge Presents: Tales from the Tour Bus
Genre: Half hour animated documentary
Studio: Judgemental Films/Zipper Bros/Sutter Road
Find it on: Cinemax, seasons 1 (8x) and 2 (8x)

Tales from the Tour Bus poster

Since the demise of its “Skinemax” adult late-night fare, Cinemax has been struggling to define an identity. It’s unfortunately best known as the destination for big brother HBO’s hand-me-down movies, and Canadian or British series likely already passed over by PBS, Amazon Prime, and Netflix.

All that being said, there are a few glimmers of hope. Among these is Mike Judge Presents: Tales from the Tour Bus. Although I’ve come late to the series, I’ve been an enthusiastic viewer since discovering it in its second season.

Tales from the Tour Bus is an animated documentary series, created by Mike Judge. Judge is most famous as the creator of the animated series Beavis and Butthead and King of the Hill, as well as bringing us HBO’s Silicon Valley.

Now, I will admit an “animated documentary” does sound a bit odd, but it works quite well. Interviews are shown via what I presume is some type of rotoscoping (animating regular video). And animation also allows the re-creation of interesting scenes from the subjects’ lives.

I first tuned in when the description of Season 2’s opening episode caught my eye as I scrolled through my FiOS program guide – George Clinton and P-Funk. Despite being a blue-eyed, white Boomer from suburban New Jersey, I do love me some funk, so I tuned in. The episode immediately grabbed my attention and it turns out Season 2 is all about funk. I watched each week as new episodes covered subjects like Bootsy Collins, Morris Day and The Time, Rick James, and James Brown.

Season One covered country stars such as Johnny Paycheck, Waylon Jennings, and Jerry Lee Lewis. I had to go back and catch up on via Cinemax video-on-demand. Country’s not so much my thing, but the format of the series still made it interesting.

On the Road Again

So take a detour from your usual viewing and check out the first two seasons of Tales from the Tour Bus. No news yet on a renewal for a third season, but let’s hope Cinemax keeps this magical mystery tour around for a while yet.

David Tice is the principal of TiceVision LLC, a media research consultancy.
Don’t miss future posts by signing up for email notifications here .  
– Read my new book about TV, The Genius Box. Details here . 

A Magnolia Channel Could Bring Discovery Gaines

chip and joanna gainesNot surprisingly, news came earlier this week that Chip and Joanna Gaines – the design power couple behind the Fixer Upper series and the Magnolia brand – are coming back to television. This time, not solely as series stars but curators of their own network.

Discovery, which absorbed Scripps Networks and their HGTV, Food, Cooking, DIY, and other channels, is behind the offer to the Gaines.

I’ll make the assumption that their new network will replace one of Discovery’s lesser channels. (I’m looking at you, American Heroes and Destination America.) As noted in my new book, “The Genius Box,” large network groups took the same strategy as CPG companies in supermarkets. They filled program guide “shelves” with little-wanted brand variations, just to prevent the competition taking that space. But this resulted in many weak networks that offer little differentiation and lots of repurposed programming.

In this respect, the move to offer the Gaines the chance to rebrand and reprogram one of these networks makes sense. It can’t help but to be an improvement on what’s already on one of these lower-tier networks. And the cross-media potential of the Magnolia brand must be very enticing.

Drawbacks?

The drawback? Tying a network to a single personality has never had a good track record. Even the Queen of Media, Oprah, has been unable to make Discovery’s own OWN much more than a niche success. Nor was she able to break Oxygen before that. The problem is that even the best-loved personalities have a certain shelf life. Cable networks almost inevitably stray from their original targeted concepts to chase larger, broader audiences. And there is also the consideration that a “Magnolia” channel will cannibalize the audience of Discovery’s existing set of ex-Scripps lifestyle channels.

It sounds like any “Magnolia” network launch or rebrand is still well in the future. Regardless of potential negatives, such a move will certainly meet one rule of the Peak TV era: a brand strong enough to support its own OTT app.

David Tice is the principal of TiceVision LLC, a media research consultancy.
Read his new book, “The Genius Box” – details here
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A Potential STB-Sized Hole in Pay TV Revenue

set-top boxAs noted in one of my previous posts, at least some pay TV companies are finally pushing forward to eliminate set-top boxes (STBs) in favor of apps loaded to smart TVs. In that post, I alluded to the question of forgone revenue. A recent article in the L.A. Times put an estimate to that question.

The author of the article did some digging into costs and revenues. By his estimates, STBs cost between $150 and $250 as delivered to pay TV providers. But by average revenue from leases of those boxes, pay TV companies receive around $230 a year. This means it only takes about one year for companies to recover their expense for the box. Every month’s revenue after that is pure profit.

In terms of gross revenue, the author estimated Comcast’s Xfinity brings in $2.6 billion a year from STBs; and Charter brings in $1.4 billion. So while a billion may not buy what it used to, it’s still a large number to cut out of pay TV revenues. This is especially true with cord-cutters and skinny bundles also making a slow but sure impact.

Filling the Gap

There is surely money that can be saved from the overhead required to maintain a large stock of STBs – both administrative and in-field – but that is unlikely to fill the revenue gap. As I note in my previous post, to what new and inventive charges will subscribers be subjected in order to maintain overall revenues? And will that drive away even more consumers fed up with bring nickled-and-dimed to death by the legacy pay TV providers?

David Tice is the principal of TiceVision LLC, a media research consultancy.
Read his new book, “The Genius Box” – details here
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My New Book, “The Genius Box”

The Genius Box coverAs a reader of my blog, I hope you will be as excited as I am about the publication of my first book, The Genius Box: How the “Idiot Box” Got Smart & Is Changing the Television Business – not by coincidence being launched during the debut week of the Fall broadcast season.

Put very briefly, the book explores the evolution of the TV set and of the relationship between viewers and their sets… and the impact of this evolution on various stakeholders in the TV ecosystem such as content creators, content distributors, advertisers, measurement companies, CE companies, and the government.

I’ve had this book in my head for several years and finally had the opportunity to tackle the task of writing the book in the months following my departure from the corporate research world last fall. We all know TV is being disrupted; I found out so too are books, thus I self-published this book – but more on that in a subsequent blog post.

The Genius Box is currently available in paperback or Kindle format at Amazon, or in e-book format at B&N and Apple iBooks. Over the coming weeks, it will become available at most major online book sellers.

More details on the book, and resources for the press or reviewers, can also be found on The Genius Box pages on the TiceVision website here.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Channels tuned or streams viewed – few watch it all

Nielsen logo
Nielsen just released their annual estimate of linear TV channels tuned by TV homes, and the proportion is down to a little more than 7 percent. This represents a decline of about half in the past decade (15% in 2006).

This trend would have been more useful with an accompanying trend in the denominator, channels received. Doing a little digging on Google, I found that in 2006 Nielsen reported TV homes received 88 channels. In 2016, the average number was a little over 200, so for the sake of argument I’ll use 200.

Let’s Do the Math

Not surprising for those in the know, this means that the average number of linear channels tuned has remained relatively constant. It was roughly 13 channels in 2006, compared with 15 in 2017. Neither the doubling of linear channels available, nor the massive increase in streaming options since 2006 (not accounted for here at all), seems to have had much impact on this average tuned number.

No doubt some will jump on Nielsen’s report as justification for moving to an “a la carte” pay TV subscription system or evidence of how pay TV offerings don’t address consumer wants. There is certainly an argument to be made that today’s TV network groups put out too many channels, in an attempt akin to CPG companies grabbing as much shelf space as they can command. But does the seemingly low proportion of channels viewed really mean consumers aren’t being served?

Let’s look at other subscribed media. Satellite radio? About five channels of the 100+ channels on SiriusXM take up 90% of my listening time. Newspaper? I might fully read one article per section. Magazines? This varies a lot. I read almost all of The Economist every week, but maybe one article out of the 25 in each month’s Road & Track; other magazines fall somewhere in between. SVOD services? I watch only a handful of their original series. While this is anecdotal, it is reasonable to assume most subscribers fully consume only a small portion of the content available.

Are Subscriptions Socialized Media?

The point here is that almost every medium that relies on a subscription model offers far more content than any one of its users either want or have time to consume. This bundling is a sort of social contract with your other subscribers – you each are subsidizing the other so that in total the overall costs are lower for everyone to get the content in which they are interested.

So the next time someone pulls out this share of TV channels in an argument, I’m going to ask what proportion of the 700 original Netflix series and movies produced in 2018 they watched. I’m guessing it’s not more than seven percent either.

Will Comcast Set Us Free From STBs?

Comcast Xfinity logoIn what should be a surprise to no one, Comcast is pushing forward to eliminate its set-top boxes (STBs) in homes with connected TVs. The surprise is that it’s taken this long.

For pay TV companies like Comcast, this is a no brainer. From a systems development perspective, these companies have been held back by the multitude of STBs they have to manage that are of different ages, models, and manufacturers. In a real sense, their innovations could only be as good as the worst box to which they still had to design.

For consumers, this is a welcome step in the right direction. As I’ve noted a number of times over the years, viewers prefer to reduce their boxes and have those services as downstream towards their sets as possible – preferably built into the set. This is why TiVo’s separate boxes lost out to less-capable DVRs built right into pay TV STBs. Or in the VCR and DVD era,  combo TV sets had those devices built right in. Or why today Roku and FireTV software are consolidated into sets.

For a number of years, pay TV providers have offered a STB work-around through their mobile apps. I often use my FiOS app on a tablet to search, set my DVR, or change channels. But unlike my old Comcast Xfinity app, it doesn’t allow me to initiate a VOD program on my TV set (yes, I’m one of the few who frequently uses VOD). This is a big drawback as it means I still have to struggle with my remote and the clunky STB interface.

The Revenue Hole

This evolution towards a totally app-based interface is welcome to both sides. It can only improve the user experience. But the interesting question is how will pay TV services make up the loss of rental fees for their boxes and the remotes. This is not an insignificant number considering the average pay TV home having about three sets. That’s roughly $25-30 a month that will be lost to a pay TV provider when a home goes connected. I suspect an “app convenience fee” or something is in our future, as the price of the replacement of our STBs.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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RSNs not VIPs in Merger Deals

[update: the day after this was posted, the Dept of Justice approved the terms of the Disney-Fox deal provided Disney divest itself of the Fox RSNs]

FSN Southeast logoRecent reports in the trades say that both Disney and Comcast are willing to divest the regional sports networks (RSNs) owned by 21st Century Fox to facilitate their proposed purchase of Fox assets. An interesting development, especially since each would be the most likely partner in such a divestment by the other.

RSNs are interesting beasts. There are about 40 RSNs in the USA serving the 82 local major league professional franchises in MLB, the NHL, and the NBA. 20 of these are owned by Fox, 8 by Comcast (NBC Sports), and the remainder split between AT&T, Charter, and independent owners. While most serve all the franchises in their region, a few are dedicated to just one or two teams.

RSNs have a strong local presence. Their connection to their respective “home teams” creates a substantial halo that rubs off on advertisers. This was established at least as far back as 2006, when I executed research for Fox Sports Net. This study conclusively showed the benefits of advertising in RSN MLB coverage versus generic MLB national games. It was repeated with similar results for local NBA teams.

However, despite their success at the local level, the Fox RSNs resisted tries to weave together the local RSNs into a competitor to ESPN. Their differing schedules made establishment of national sports content, cleared at a consistent time, impossible. Ultimately, this led to the establishment of the FS1 and FS2 networks.

Conversely, ESPN’s attempts at local coverage to complement their strong national TV presence and local radio affiliates – with dedicated sports websites for Boston, Chicago, Cleveland, Dallas, Los Angeles, and New York – met with less-than-hoped success.

When the original Disney proposal for Fox came to light, it was naturally assumed that the Fox RSNs would be combined into ESPN – although a dip back into local was something I questioned in my first post about the Disney-Fox deal. However, if nothing else, adding the RSNs may provide more value and content for the ESPN Plus SVOD service.

On the other hand, a Comcast acquisition means trying to integrate the 20 Fox RSNs with their 8. Controlling 28 of 40 RSNs could raise questions about market competition. And, with NBCSN already existing as a national sports network, there is really no need to acquire these RSNs to cobble together a pseudo-network.

The L.A. Lesson

It may be that RSNs are just too much trouble for these large national media companies. With each RSN having to negotiate with several major league teams, and numerous minor league or college teams, every few years, is it really worth the trouble? Ask Charter about Spectrum SportsNet LA, the Dodgers RSN with a huge 25-year contract, that hasn’t been able to get carriage on any other provider than those now owned by Charter. Less than half of Los Angeles has access to it.

Much will happen with the Fox deal, regardless of who wins, between an agreement and the deal being closed. As with the rest of the media industry, sports stakeholders will be watching and wondering how it will effect them. Stay tuned!

David Tice is the principal of TiceVision LLC, a media research consultancy.
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SKY skips the satellite dish; who’s next?

SKY TV logoAlthough this is international news, it also has ramifications for the US. Europe’s Sky satellite television service is going to offer its full range of channels via streaming. Not just a skinny bundle, but all of its offerings. Starting in Italy, then Austria, and later the UK, Sky subscribers will no longer need to have a satellite dish.

Numerous MVPDs have experimented with streaming offerings. in the US. While most notable of these is DISH’s Sling TV, these have typically been low-end or incomplete offerings that do not replicate the standard MVPD levels of service (for various reasons including cost and streaming rights). But this move by Sky – albeit in a different international market and regulatory environment – is a harbinger of the future.

It’s hard to conjure up a thought experiment that doesn’t point to all video content being delivered via the internet in the not too distant future. Although Sky is still mandating the use of its set-top boxes, MVPDs could likely completely do away with them and just focus on bundling and delivering internet and content.

Of course, this will cause even more disruption than we’ve already seen. Traditional MVPDs will try to transition to a new model where revenue streams from STB and remote control rentals are important. But the savings from not having to maintain and manage several makes and generations of STBs might make the financials more tolerable.

Consumers could get rid of one of the boxes connected to their sets. Satellite viewers wouldn’t be subject to rain or weather interruptions. And, in theory, the local cable monopolies become extinct since delivery by internet means regional MVPDs can become vMVPDs everywhere. Finally consumers may see strong competition for their pay TV dollar. We may see an outcome where we have some firms with cheap bundles competing against premium-priced bundles with superior interfaces. It will be interesting to see how it plays out.

Polishing the crystal ball

In 2004, I spoke at the NAB’s Futures conference and made the somewhat accurate prediction that in 15-20 years’ time we’d be watching TV just by Googling each program. I missed the detail that we’d actually be saying “Hey Google” or “Hi Alexa” first, but close enough. It may be still another five years before all the rights and technical hurdles are crossed, but I think this Sky move could signal the final set of nails in the traditional MVPD coffin before we move to an all streaming, 5G-enabled video paradise.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Time for Spike to join TV heaven

Spike logoLet us all take a moment today to remember Spike, before it goes off into TV heaven to join other late and mostly unlamented networks like the DuMont Network, G4, Soapnet, INHD, Fine Living, and ESPN 3D.

Of course, the current “Spike” was itself built on the bones of its previous incarnations, in sequence The Nashville Network, TNN, The National Network, The New TNN, and Spike TV. A reminder that television is as ruthless as the Mafia if you don’t deliver an audience.

At the time of Spike TV’s launch in 2003, it sure seemed like a no brainer – a network programmed for men and promoted as such. If I remember correctly, it was the first network to do so, although in 2003 there were already several networks promoted “for women” that had varying degrees of success. Even if many other networks had a predominantly male audience (like ESPN), they weren’t promoted as “for men.”

Unfortunately, Spike TV never really found the great success that was hoped for. After seven years, in 2010, it rebranded to appeal to a wider audience while keeping its name, but at that point, one can assume the Spike name didn’t have a lot of brand appeal to women. It did strike gold in 2015 by being the lucky network that didn’t pass on Lip Synch Battle, which is probably the only program anyone will ever remember from the network.

I was always outside of the Spike demo, so I didn’t watch it much aside from the occasional movie.  But I did watch one program without fail, Deadliest Warrior. This show pitted soldiers from different periods in simulated battles (Roman centurions versus Navy SEALs – who is the deadliest warrior?!?!). It ran for only three seasons (2009-2011) but it was a favorite watch for me and my son (aged 12-14 at the time).

It’s an interesting observation that a later network aimed at young men, Esquire, was also a flop, closing up shop after only a few years. Perhaps there is a reason why young men are so hard to reach and why sports are so valuable to do that – those youngsters just won’t sit in front of a set to make a fully male-programmed network successful.

Spike’s replacement

Spike will be replaced by The Paramount Network, a new network (not to be confused with the late, little lamented UPN) and one of Viacom’s key five networks in their new business strategy. Paramount is intended to be Viacom’s answer to prestige content, a la FX, so let’s hope they keep on brand – and on the air – for more than a couple of years.

Lastly, as a footnote, check out the Twitter feed from @Spike from yesterday (Tuesday Jan. 16). In either an ingenious last marketing effort, or just the social media director truly going off-reservation on his last day, it has some final, very funny tweets.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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