Then Again...
TDG's Weekly News Wrap & Commentary
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Retention will be key for new SVOD services
Précis – A long-standing feature of successful SVOD services is the absence of a contract—you can cancel at any time without penalty. For operators, the benefits of this feature have long outweighed the disadvantages. But that could soon change.
Reuters
TDG – As options for high-quality SVOD services broaden, the discounts-for-scale calculus becomes more complicated. True, Apple TV+ at $5/month sounds great, but what happens after you've watched the handful of shows that will populate the service? Will the assortment and windowing of original shows be able to sustain paying subscribers? That remains to be seen, but all eyes are on how Apple plays this.
A
s consumers add new SVOD apps to their roster, they will reach and, in some cases, exceed self-imposed ceilings regarding the number and cost of apps used; the viewing experience simply becomes too cumbersome and the costs too high. Consequently, some will choose to cancel other apps in order to return to an equilibrium. Others will be comfortable adding a few new apps to the mix, but their viewing will be further fragmented among an ever-widening array of services.
Successful SVOD operators must be certain that, when these ceilings are exceeded, their service is included in the “foundational few”
– those apps that consumers keep in place even as they toggle between others to binge new content. Weekly releases and short-term promotional contracts will be embraced by some SVOD providers, especially for those without a deep third-party library or the cash to create a expansive roster of originals a la Netflix.
TDG is set to launch original research on fatigue, service toggling, and the impact of new arrivals like Disney+. If you are interested in learning more about this research, please contact
Michael Greeson
.
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NBA Digital to launch DTC streaming service featuring live games
Précis
– Positioned as the first DTC sports app to feature live games, NBA TV’s streaming service will include more than 100 exclusive, nationally-televised NBA games plus other original programming and on-demand content. It will offer new camera angles from smartphone footage, live onscreen group chats, statistical graphics, and social media content.
The service will cost $7/month or $60/year, and c
urrent NBA TV linear subscribers can authenticate for free.
MediaPost
TDG – It appears that Turner and the NBA (co-owners of the service) are getting serious about reaching live sports streamers. As TDG first forecast in early 2018, all major TV networks and sports leagues will offer a robust DTC service by 2022. Though recent momentum suggests this benchmark may happen before that time, many of the early sports entrants have chosen to release watered-down versions of their linear channels, afraid of upsetting their longstanding pay-TV relationships. As pay-TV subs continue to decline, however, the necessity of building linear-equivalent DTC platforms becomes more obvious. To that end, NBA TV bills itself as “the ultimate destination for around-the-clock access to premium NBA games and programming,” versus as a sidecar supplement to the linear channel. TDG expects to see other leagues and TV networks come to this same conclusion, and sooner rather than later.
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Roku Q3: Losses increased, but so did subscribers, viewing time, and revenue per user
Précis
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Roku increased subscribers from 30.5M in Q2 to 32.3M, a modest gain, with average revenue per user up 30% year over year, from $21.06 to $17.34. However, net losses rose to $25.2M in Q3, nearly three times that of Q3 ’18.
Variety
TDG – Roku is playing the long game, as it should, less worried about quarterly profits and more concerned with growing subscribers and time spent on its platform, both of which increase the value of and demand for advertising (which now accounts for the majority of its revenue). To that end, Roku doubled the number of ad impressions year over year, a very positive indicator. Another hidden gem in its Q3 numbers: overall streaming hours on the platform increased to 10.3 billion, up 70% year over year.
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Pay-TV in Q3: Dish Network reports rare gain in video subscribers
Précis
– In Q3 ’19, Dish Network reported a net gain of 148K video subscribers, including the loss of 66K satellite subscribers but the addition of 214K Sling TV subs. This is the best quarter Dish has had in some time.
FierceVideo
TDG – For perspective, Dish lost 341K subscribers in Q3 '18. In Q2 '19, losses were only 31K, with gains turning positive in Q3 '19. Pause and let that sink in. Trending suggested that Q3 ’19 subscriber counts would be relatively positive, but no one expected these results.
So how does one interpret these numbers? Some will argue this is the first sign of a pay-TV turnaround. That’s a bit generous. Note that Q3 pay-TV numbers include (1) the largest declines in cable TV subscriptions to date, and (2) continuing mass exodus from AT&T’s DirecTV satellite (down 1.2M ‘premium’ subs). Dish's numbers, then, are an outlier.
Second, rekindled demand for Sling TV corresponded with a new wave of aggressive discounts, which Dish foreswore several years ago. True, they can spike short-term additions, but once discounts disappear, so too do the subscribers.
Third, and as TDG first noted in in 2015, the exchange rate for DBS-to-vMVPD subs is quite poor. No surprise, then, that Dish's pay-TV revenue declined from $3.4B in Q3 ’18 to $3.2 billion in Q3 ‘19, down 7% year over year, with net income down 18%. This will only worsen as the cost of promotions take their toll on per-sub profit.
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Recent & Upcoming Reports
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Cogitations
"The point of modern propoganda isn't only to misinform or push an agenda. It is to exhaust your critical thinking, to annihilate truth."
Garry Kasparov
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