1. The Industry’s Two Biggest Problems Remain Unresolved

The television industry has two big problems, one a consumer issue, the other a business issue, and neither of them will be any closer to resolution by this time next year.

Let’s start with the consumer issue, because ostensibly, that should be the easier one to fix: Search.

Yes, search works fine within individual apps and even on smart TVs and connected devices, most of which even have voice-enabled search by this point.

But none of them are able to give you a comprehensive menu featuring the shows on the services you’ve subscribed to, or even to help you find them. 

That, sadly, is still more easier accomplished via Google than via the home screen of a connected device. 

Not because of any failure on the part of the device manufacturers, but because the proprietors of the various streaming services do not allow for “deep linking” or the ability to click on a link or a tile on a device’s menu and get taken straight to the series. They want you to go in through their service’s own home screen so that they can try and upsell you on other shows and capture your viewing data and possibly serve you some ads.

The resulting system is thus incredibly frustrating for consumers, most of whom don’t work in the industry (i.e. are not reading this article) and thus are not all that up on which service has which show. (The fact that so many streaming services have very similar types of shows—call them “HBO-like” shows—does not help either.)

But frustrating though that may be for consumers, the desire to control the experience is stronger and I don’t see streamers giving it up.

[ETA: Many services do allow you to deep link to some (but not all) of their shows once you’ve searched for them on your device’s universal search feature and indicated that yes, you do want to, say, watch White Lotus on HBO Max rather than buying the entire first season from Amazon. It’s clunky and doesn’t solve the greater problem, but it is a step in the right direction. HT to Barry Kiefl, President of Canadian Media Research Inc. for the note.]

The second issue is one I’ve been beating a large and loud drum about these past months: Carriage and Retrans Fees.

Since the passage of the Cable Act almost 30 years ago, the U.S. TV industry has gotten used to taking in tens of billions of dollars in retrans and carriage fees from the MVPDs each year. This created a situation where the networks acted like lottery winners, handing out money left and right to production companies, actors, writers, showrunners and, of course, suits. 

All well and good, but those numbers became entrenched and 30 years in they have become the norm.  

And the thing about streaming is that there are no carriage and retrans fees. Which is why everyone is freaking out about how streaming is not as good a business as linear.

Because it’s not.

There’s no magical pony handing out tens of billions of dollars in carriage and retrans fees, money that the MVPDs ultimately collect from consumers in the form of higher cable bills.

And that’s not going to change either.

What might change is TPTB acknowledging that this is the real issue, that streaming can indeed be a lucrative and successful business, but without carriage and retrans fees, it will never be as lucrative as linear once was.

WBD seems to get this, which explains much of their cost-cutting activity, but I am not sure how much the rest of the industry or much of the media does.

So there’s that and those two issues promise to keep nipping at the industry’s heels throughout 2023.

2. Churn Leads To All Sort Of Bundling

I feel like I’ve been predicting this for the past five years, maybe even longer. 

It goes back to 2017, when Hulu did a deal with Spotify aimed at college students and everyone (myself included) decided that non-traditional bundles would be the future of bundles, that everything that came with a monthly subscription would be bundled together, be it storage, the Washington Post (Amazon owns them) and, of course, audio and ebook services. 

It hasn’t happened yet, and while hope springs eternal, consumers don’t seem all that jazzed about it. I suspect they find it overly confusing.

Far more likely is a scenario where even more of the smaller MVPDs give up on creating their own pay TV services, because it’s expensive and because there are alternatives, companies like MyBundle that will do it for them, packaging vMVPDs and FASTs and some streaming services together so that the folks at home can still get their broadband and TV from the same provider on the same bill.

It seems the thought of having to get broadband from someone other than the people who are also selling them their TV service strikes terror into the hearts of American consumers and so bundling that all up for them helps lowers their blood pressure faster than than you can say beta blocker.

The other type of bundling we might see— likely in 2024 or 2025—is a situation where OEMs package up a bunch of streaming services and use it as a come-on for a new TV, either as a freebie or as a special deal. (“Buy this Acme Smart TV and get two free years of any four streaming services of your choice.”)

The catch? The deal is for the ad-supported version of said streaming services and the device OEM get a cut of ad revenue in return for paying for the subscriptions, while the SVOD services get a whole bunch of ad-supported subscribers they can sell to advertisers for the next two years.

Everybody’s got an angle.

3. Cable TV Still Won’t Fucking Die

No matter how badly all those analysts and prognosticators want traditional linear pay TV to die, it’s just not going to.

Certainly not in 2023.

Case in point: Fire Country.

I bet most of you reading this have never heard of it.

It’s on CBS.

Critics are decidedly meh on it—it’s got a 50 percent rating on RottenTomatoes.

And yet eight million people tune in to watch each episode.

That’s a laughable number compared to TV’s 1980s heyday, but it’s a whole lot more than the four million who watched the season finale of HBO’s White Lotus, a show I am certain that most everyone reading this has heard of.

So yeah, cable TV is not going anywhere. There are still lots of people who watch it, who like it better than the shows on streaming and don’t mind paying for it.

At most they might switch to a vMVPD, something like Hulu Live TV or YouTube TV, at which point I have no doubt that those numbers will be seized on as proof of increased cord cutting and the impending death of TV as clearly all those viewers have quit cable and are now watching streaming.

But they’re not.

They’re watching Fire Country on CBS on Friday nights at 9 pm, only via a different delivery mechanism.

Which is why vMVPDs will continue to have a banner year, They’re still cheaper than cable, they have a better user experience and you can access them and all your streaming services using a single remote.

A vastly underappreciated advantage, especially for an audience that still loves cable.

4. RIP, Password Sharing

2023 will be the year that everyone gets serious about putting an end to password sharing. Or at least makes noise about getting serious.

Sort of like when your father would threaten to pull the car over if you and your siblings didn’t stop squabbling in the back seat.

The problem is that password sharing isn’t that easy to solve without pissing lots of people off.

I’m not talking about the people who share passwords with their friends or who never told their old roommate they need to get their own account. They know they’re gaming the system and they’re not going to be all that upset. (If anything they may actually be relieved to finally cut all ties with that old roommate.)

Ditto people who have put their elderly parents on their account because it’s just easier than trying to set them up and have them remember their password and then they still write checks by hand for everything and… well, you know the drill. 

Those people will just pay for the new account.

But then there are all those people who are still a family unit of sorts. The ones with college age or adult children who started using the family Netflix account back in middle school to watch reruns of American Dad and now have ten years of viewing history embedded in the account

At one level it’s time for them to grow up and get their own accounts. At another, they’re still able to make use of mom and dad’s health insurance (at least until they are 26) and stay on their cell phone plans (it’s cheaper) and so there’s precedent.

Kicking them off their parents' streaming accounts is going to feel more than a bit punitive. Especially since in many cases, they are the ones who installed the app in the first place and set up the profiles and told their parents which plan to get.

So it’s tricky. 

Yes, they should have their own accounts. And at a time of massive churn, where streamers want to be able to prove they have as many subscribers as possible, it’s a smart business move, one that likely justifies turning their backs on all those years of claiming not to care about password sharing.

The issue though isn’t so much the backtracking, it’s that many of those Zoomers and younger Millennials, ex-roommates, great-aunts and second cousins may then decide that having their own subscription just isn’t worth it. It was a nice-to-have thing when it was free, but it’s not something they’d ever actually pay for.

Or they’ll subscribe… but just for a month here and a month there—however long it takes for them to watch the buzzed-about new series.

So there’s that and it’s why so many of the streaming services are hesitant about pulling the trigger.

Netflix is being smart about it—letting people transfer their viewing history and giving them the option to stay on the same master account—but even then it’s a gamble as to how many of those viewers will actually take them up on it.

5. Streaming Measurement Gets A Little Easier

So like cable, Nielsen won’t fucking die either.

As much as everyone claims to be over Nielsen, much of the industry is still anxiously awaiting the 2024 rollout of Nielsen One, their vaunted new solution that will cure all of the issues around measuring streaming viewing.

Or not.

It’s never really mattered before, because for years it’s been easier for ad agencies to sell their clients on the idea of a Nielsen approved rating than anything anyone came up with to challenge it.

But the move to streaming got a lot more people comfortable with the idea of using ACR data from smart TVs to measure viewership.

Which means that when NBCU announced that it was using iSpot and Conviva data as currency for some of its deals earlier this year, it did not seem as if the sun and the moon had suddenly traded places.

And that other alternative measurement providers like VideoAmp and Innovid are getting their due too. Ditto purveyors of alternative panel data like TVision and purveyors of national representative panels like VIZIO. (The latter two provide a way to figure out exactly who in the household is watching the TV.)

This is not to say that 2023 will be the year that streaming’s data and measurement issues go the way of the dodo bird.

But it is the year that alternative measurement companies will continue to see greater acceptance especially from those outside the core group of forward thinking “early adopter” types. That’s not nothing and so 2023 will be a big year for the future of alternative TV measurement.

6. Ad Avoiders Get Seen

Remember the Black Mirror episode 15,000 Merits, which envisioned a dystopian world where ads were omnipresent but people of means could pay to avoid them?

Not really a fantasy anymore.

There are, right now in 2023, a sizable number of relatively affluent tech savvy people (and no one seems to know exactly how many) who manage to successfully avoid seeing ads.

They pay for the ad-free versions of streaming services.

Employ an array of ad-blocking software on their phones and browsers.

And pretty much only see ads during things like live sporting events and election results.

Oh, and did I mention they were largely educated and affluent and smack in the middle of the sweet spot for many major brands?

So 2023 will be the year that the industry starts to realize that this group exists and that there really isn’t a good way to reach them. 

They’re not the majority, but they are an important group, especially from a demographic perspective, and how to reach them is going to become an issue this year, especially as the streaming ecosystem grows increasingly ad supported.

Sports is obviously one way—it’s the only place many of them will ever see ads—but depending on the brand, the spend may not be worth it because the context is off.

Either way, it’s bound to make the price for ads on streaming sporting events go even higher.

7. Sports Go Streaming

As the various streaming services turn to advertising and then realize that most of their subscribers prefer the ad-free version, sports are going to become more and more valuable.

Not because there are so many more sports fans, but because it’s the one place where all of a service’s subscribers are forced to watch ads.

(The alternative, for those of you who don’t partake, is to listen to announcers blather endlessly through lengthy time outs. Something nobody wants to do.)

If you can suddenly start selling ads against an audience that is double the size of your normal audience, that’s a good thing, especially, if, as noted at Fearless Prediction 6, many of them never actually see ads. And since games can last several hours, that’s a lot of ads.

Look for all of the major streaming services to bid ferociously on sports rights across the board and for the FASTs to start snapping up rights to smaller sports and smaller NCAA conferences.

And for the remaining regional sports networks (RSNs) the last redoubt of the superfan, to make the move to streaming as well. Especially if Bally’s RSN apps are successful.

The leagues too, seem to finally be waking up to the fact that they need to reach younger fans, that their average viewer is well over 50 and not getting any younger.

That will help the RSNs in their migration to streaming. Or at least lessen some of the resistance.

This is great news for sports fans and for streaming, only it could easily result in a massive unforced error.

If sports on streaming are going to succeed, the industry needs to resolve its giant honking Lag Issue, where sports on streaming can lag as much as a minute or two behind live and cable. It’s an issue that irks fans to no end and it is definitely not a good thing if you’re trying to make sports betting a thing as well.

The good news is that it is a tech issue, one that I have been told is not impossible to solve for. But if streamers really want fans to take them seriously, they need to stop twiddling their thumbs and solve it.

8. Program Quality Replaces Program Quantity

As the spigot gets turned off and the major streaming services scale back the number of originals they’re churning out each year, a new emphasis will be put on making sure those new programs are really good.

Not that anyone is ever looking to roll out bad programs, but when hundreds of new series were being rolled out each year. quality control (or lack thereof) became a major issue, a situation the streamers are finally looking to change.

Easier said than done, and of course some streamers will be more successful than others, sort of the way different networks shone in different eras (think CBS in the late 70s, NBC in the mid 90s). It’s a tough assignment because it’s very hard to know with any degree of certainty what audiences will take a shine to.

As in who would have thought that a series about a quasi-medieval fantasy world filled with knights, wizards, dragons and monsters, featuring a cast of unknown European actors would become the 2010s biggest hit?

So there’s that and that fact that one person’s “great” is another person’s “trash.” 

Still, we can expect to see more effort being put into creating the sorts of shows that will create buzz, win awards and keep people subscribing.

Plus a lot of attempts by the various streaming services to create shows that have the same appeal as Yellowstone, the Paramount network drama whose success took the industry by surprise, leading the New York Times to sneeringly refer to it as a “red state favorite.”

Something the Pitchbot had a field day with, but I digress. 

We will also see a push to quality on the FASTs, with an emphasis on reruns of beloved network shows, popular movies and news at the expense of quasi-UGC content. We’ll also start to see more correlation between their on-demand and linear libraries, so that if you start watching a show on the linear feed you’ll have the option to binge it in the on demand library.

9.  Linear Channels Will Become A Thing On SVOD 

Paramount+, Peacock and Discovery+ already have linear channels and the rest of Team SVOD will not be far behind.

As the FASTs have discovered, there is all sorts of value in linear channels.

They are a great way to surface library content, especially to ad supported viewers.

They increase time spent viewing, which means that said ad-supported viewers see more ads, which results in more revenue.

They can be a way for the programming team to show off their chops, creating the TV equivalent of mix tapes. (Or Spotify playlists, depending on your generational reference point.) Which creates fans and gives viewers the feeling that the service “gets” them.

That, and people like not having to worry about making a decision every time they turn on the TV. (Analysis paralysis.)

One thing about linear channels I am curious about though: for anyone over the age of say 30 or 35, there’s something that’s both very empowering and very calming about being able to take the remote and flip through dozens of channels. I wonder if younger generations who grew up with TikTok and YouTube will find it has the same appeal. 

10. The Operating System Wars Heat Up

The big battle in TV, especially on a global basis, is for who will control the TV operating system. Because whoever controls the operating system controls pretty much everything from data collection to which programmer’s apps are on the TV and how easy they are to find.

All pretty powerful stuff.

The battle will largely be fought outside of the U.S., both in Europe and in markets where much of the viewing is still done on mobile phones.

The skirmishes will feature Team Consumer Electronics (Samsung and LG) versus Team Internet (Amazon and Google) with Team Independent (companies like Foxxum who can supply custom operating systems to smaller local OEMs) a factor as well.

It’s something we’re going to be looking into a lot at TVREV this year, as 2023 should be the year the conflict really begins to heat up, battle lines get drawn and strategies become more apparent.

Resolution, however, will be a long way off, which is why understanding the situation—which involves taking a much less US-centric view of the world—will be key.

Stay tuned.

BONUS PREDICTION: TVREV’s Newest Special Report, “FASTs Are The New Cable, Part 2: Advertising” will launch next Tuesday. 

Okay, so that’s not actually a prediction, it’s a shameless plug and a heads up for when you get back from CES. 

And in it you’ll find out all about our 11th prediction: the unexpected boom in contextual advertising on streaming.

Big thanks to Mike Shields, who worked with me on this report and to our sponsors, Zype, VIZIO, Pluto TV, Magnite, LG Ad Solutions and IRIS.TV. 

And Happy New Year from the TVREV team.