1. Apple Makes Some Moves

After more or less sitting back and watching what was going on in the early days of the Flixcopalypse, Apple appears to be ready to make some moves.

Shortly after unveiling their deal with ViacomCBS to bundle CBS All Access and Showtime via their AppleTV Plus platform, Apple announced a deal with VIZIO, the nation’s second largest smart TV manufacturer, to put the Apple TV Plus platform onto VIZIO’s millions of smart TVs (it’s an automatic update for most users.) 

This will allow users to launch AppleTV Plus and all the apps that run with it natively from their VIZIO TV, no Roku or Amazon Fire TV sticks necessary.

Why It Matters

Apple is positioning itself as a better alternative to Roku and Amazon for the Flixes, a move it can make given that the platform does not currently have any sort of ad business.

Cognizant of the fact that perhaps a half dozen people own the $180 Apple TV device, the company is now looking to port the operating system to non-Apple devices like VIZIO in its quest to become the Switzerland of content aggregators.

That said, it’s still not clear what Apple’s goals are with all this, you know, what’s in it for them? Because given the billions they are spending on original programming, a bunch of $4.99/month subscriptions is not going to put them in the black. 

I assume they see it as a marketing tool, as a way to keep Apple’s name front and center and to capture email addresses that they can then use to market iProducts of all sorts. 

What’s odd though, is that while it’s very obvious what’s in this for the VCBS’s of the world (more distribution)  it’s less clear what’s in it for consumers beyond the seriously deep discounts they’re offering. (e.g., Apple’s CBS All Access + Showtime deal is actually $1/month less than what you’d pay for Showtime alone.) Because without the actual Apple TV device, you've still got to click on the Apple TV app first, which doesn't really have you any steps over clicking on the Showtime app.

The other bit I’m still not sure about is this: given how little there is in Apple’s own Apple TV Plus catalog, wouldn’t pushing viewers to the more plentiful CBS All Access and Showtime mostly work to ensure that viewers forget that AppleTV Plus exists altogether? Or does Apple have some plan to drive you there while you’re watching CBS?

The one situation where I can see Apple winning (and this is a long shot) is if Roku and Amazon continue to be unable to come to terms with the various Flixes and viewers turn to Apple because they, like the Roku of yesteryear, have access to all the services they want to watch.

Which, even if it does prove to be the case, bumps up against the pesky fact that somewhere between two-thirds and three-quarters of OTT viewers watch TV via a Roku or Fire TV and a good percentage of them would have to give up those devices in order to make use of the full functionality of Apple TV Plus.

Like I said, it’s a real long shot.

What You Need To Do About It

If you’re Apple, I keep coming back to one thing: a lower priced Apple TV device. It’s a smart move to put your app on VIZIO and all, but if your goal is to sell more hardware overall, then a really well priced stick that does things its competitors don’t do would seem to be the ticket.

If you’re a Flix, you’ll want to really think about what it is that  Apple wants from you before you get into bed with them. Remember the music industry...

2. Kagan Sees More Cable-Free Households

Research firm Kagan--they’re one of the better ones out there--found that 37% of Americans with a broadband connection do not have a pay TV service of the old school MVPD kind. That’s up from 12.5% in 2014.

They also found that the number of broadband-only households grew 80% more in the first half of 2020 than in the same period in 2019 (when there was no pandemic.)

Why It Matters

All those headlines from the past five years about the “massive wave of cord cutting” may actually be starting to come true.

“Massive wave” would, of course, be pushing it, but as we’ve been saying, there are many reasons cord cutting/shaving/nevering is going to see a huge uptick over the next two to three years.

To review, the main reason is that with the launch of all the new Flixes and the rapid growth of the FASTs, there’s a whole lot more to watch on streaming than ever before, and--more important--the programming available on OTT is now far superior to, and more plentiful than what’s on broadcast and cable. And, unless you subscribe to a dozen or more apps (and even then…) streaming is also a lot cheaper than old school pay TV, which, with the cost of set top boxes and taxes and whatnot thrown in can easily run over $100.

With something like 30 to 40 million people unemployed thanks to the pandemic, that cost savings is going to take on even greater importance. It’s a big part of why the FASTs are so hot right now, and why many of the major Flixes will have lower-priced ad-supported versions as well.

Live sports is still an issue--you need some sort of pay TV subscription to watch--but many people seem to be solving that by turning to vMVPDs and their monthly subscription plans, which they can then put on pause during the off-season.

If there is an off season.

What You Need To Do About It

Not much anyone can do other than prepare for the inevitable. The TV ecosystem is changing, though it’s more a rearranging of the deck chairs with most all of the same players involved, just in different roles. But a future where TV is a series of Flixes and FASTs delivered via broadband is already happening, for most it’s a better deal than traditional pay TV,  and as such, these massive shifts in viewing behavior will only increase over the next several years.

In other words, get used to it.