At Pay TV Show, Wait And See Is The Order Of The Day

If there was one moment that summed up the mood at this year’s excellent Pay TV Show, it was when moderator Kevin Gray asked analyst Colin Dixon for his thoughts on the potential of Warner Media’s new streaming service.

Dixon demurred, pointing out that there was no way to offer an opinion on the service until there was more information on what it would look like, what programming choices would be offered and how much it would all cost. His fellow panelists (myself included) largely concurred.

The industry is about to undergo a series of seismic changes and while the train has left the proverbial stations, what stops it will make along the way are pretty much anyone’s guess. There are just far too many unknowns about how things will play out to make specific predictions.

Broad predictions, however, are another story and there were plenty of those.

The Great Rebundling

One point everyone seemed to agree on was that The Great Rebundling is going to take place over the next few years. (Kind of cool to hear other people adopting that term.)

The logic train on this makes infinite sense, and it’s a two-track journey.

Consumers, the thinking goes, are overwhelmed by the amount of choice they have. There are too many subscriptions to keep track of, along with too many different algorithm-fueled interfaces.

On top of that, while consumers say they want choice, that's only until they actually have to make one: in Canada, less than 25% of viewers have taken advantage of a regulation that forces MVPDs to allow them to choose their own personalized á la carte channel packages.

At the same time, it seems to be close to a sure thing that the Flixes will soon find that the month-to-month contracts they have on offer are resulting in massive churn, and that development, when looked at through the prism of the highly competitive landscape the Flixes are competing in, will make them amenable to the sorts of deals that allow viewers to sign up for a year or longer.

The idea is that these deals will either come from the platforms themselves (sign up for one year of NBCUFlix and save 20% off of the monthly price) or from third parties like Roku, Amazon and the various vMVPDs, who will only be too happy to create a diverse series of bundles around the streaming services in order to increase their own relevance and stickiness.

The Future of vMVPDs

If there was anything about vMVPDs that got speakers and audience members all nodding their heads in unison, it was that the term itself is not easy to say.

Beyond that, we saw a range of opinions as to their future, with some seeing massive growth for the services over the next five years, with subscriber numbers edging close to 30 million. Others saw them fading away entirely over the next decade, claiming that the services were just band-aids that propped up a broken system, and that we were heading for a TV ecosystem comprised of Flixes, FASTS and a couple of broadcast networks.

(TVREV’s view is that it’s a little of both: the vMVPDs have a role as aggregators, putting Flixes, FASTS, broadcasters and the remaining cable networks into bundles, with sports, news, kids, etc., modules as add-ons.) 

As previously noted, smaller cable networks without a strong brand identity are most at risk in this new world. This is something I’d first broached four years ago in Over The Top, the idea that for many of these smaller/less popular networks it will make much more sense for them to start producing anywhere from 5 to 15 hours of original programming each week to be distributed over MVPD VOD, and while it seemed like an out there idea at the time, it was gratifying to hear it being discussed as a real option in several sessions where the speakers wen't people I knew.

The Surprising Resiliency Of Linear

After years of taking about how much viewers like having choice and picking the shows they want to watch rather than have them “shoved down their throats” (actual quote) the industry is coming around to realizing that linear feeds have their place.

The success of FASTS like Pluto and Xumo which feature linear-style channels (in addition to VOD) seems to have many giving linear a second look and betting that viewers are going to want to have some sort of linear option to free themselves of the “tyranny of choice” or “decision paralysis” (pick your psychology-tinged cliché.)

Not to continually pat myself on the back, but the idea of the “Spotifyization” of television was something I’d also brought up in Over The Top—the notion that much in the way Spotify’s linear Daily Mixes were welcomed by listeners who were tired of having to decide which music to listen to, viewers will be happy to let someone else pick the TV that starts playing when they get home from work and start cooking dinner,.

Our take is that the modern interpretation of "linear" will feature personalized feeds that adjust based on time of day, feeds that will start when the viewer starts watching and will continue playing for as long as the viewer wants to watch, using algorithms to decide which shows will keep the viewer engaged.

The Continued Difficulty of Advertising on OTT

I started and ended the first day hosting panels on OTT advertising. 

The first panel was an overview of the results of our TVREV special report on OTT advertising with commentary from iSpot’s Rob Tregenza, Beachfront’s Frank Sinton and MadHive’s Christiana Cacciapuoti, while the second was around the business of ad-supported OTT and featured Xumo’s Colin Petrie-Norris, Pluto’s Jeff Shultz, Cheddar’s Dan Schneider and a repeat appearance by Sinton.

If there was one common theme again, it was that while OTT is a great vehicle for advertisers because it allows them to run addressable advertising, the complexity of the process of buying and selling OTT advertising is keeping brands from fully embracing the medium, and while the advertising industry swears on stacks of bibles that it is “media agnostic,” most shops remain neatly siloed into “TV” departments and “digital” departments, neither of which fully understand OTT.

There was a general feeling that the sheer size of the burgeoning addressable TV advertising market—a market that will grow even faster post-Flixcopalypse (Warner reconfirming this week that there would be an ad-supported component to its offering)—will force the industry to figure out workable solutions.

Our take is that there needs to be movement toward more common measurement standards for everything from segmentation on out, so that brands can do apples to apples comparisons of their buys across platforms, at which point the increased confidence in the medium will allow the industry to get closer to the goal of fewer, better-targeted ads that brands will pay more money for and viewers will gladly watch.