1. AT&T Boils The Frog,

You know how we keep telling you that the vMVPDs aren’t really all that different from the MVPDs, that the “mesomorph bundles” of 80-100 channels are only much cheaper now because it’s that old Silicon Valley trick where you price everything really low as a way to get customers until you work out all the kinks, at which point they're hooked and they'll go along with your price hikes so long as you keep them small enough?

Why It Matters

Well AT&T TV Now, the vMVPD formerly known as DirecTV Now, is going to raise prices from $50/month to $65/month in a process commonly known as “boiling the frog”—slowly turning the heat up so that the frog doesn’t realize the water is getting hotter. (Though in this case, that $15 price jump is not exactly subtle.)

It was bound to happen though because it’s not as if the networks were giving the vMVPDs any sort of price break on their programming—if anything they are charging them more because the vMVPDs need the networks right now more than the networks need the vMVPDs.

And while the vMVPDs do have many things to recommend them over the MVPDs, including portability, they need to get past the steady stream of tech glitches if they want viewers to start taking them seriously, especially at the higher prices. It’s one thing if you have lags and crashes at $35/month, quite another at $70.

But the price hike also matters because we think that pretty soon the trend is going to go the other way and vMVPDs and MVPDs are going to need to start offering low-priced super skinny bundles.

That’s because as the Flixcopalypse hits, the first casualties are going to be smaller, less popular cable networks, the ones no one’s really heard of and/or the ones that no one can actually tell you what shows they have on anymore.

That’s going to be where consumers start pushing back, as in “why am I paying $65 month for this thing I barely watch, since I spend most of my time watching Flixes and FASTS?”

So look for low-priced super skinny bundles with just the broadcast networks with add-on packages for RSNs and 24-hour news and maybe some of the more popular non-fiction channels (HGTV et al)  provided they don’t spin out their own OTT app or get bought by VCBS first.

What You Need To Do About It

If you’re an MVPD or vMVPD, you might want to consider building up those super skinny bundles now, so they’re ready to go when you need them.

If you’re a smaller, less popular cable network, you might want to look into a plan B where you’re acting like a studio, putting out something like five to 15 hours a week of originals and selling them to Flixes or networks. 

If you’re AT&T, you might want to realize that people are going to take note of that $15/month price hike. Especially given that you’ve been shedding users the past few quarters. Unless you’re planning to give away HBO Max (a not that unlikely possibility) you might also want to have a Plan B.

2. T-Mobile Goes Quibi

T-Mobile announced that they would be launching a partnership with Quibi, a well-funded solution to a problem that no one seems to have.

Details of the deal were scarce, but it seems as if Quibi will be available to T-Mobile users for a reduced price or maybe even on an an exclusive basis at launch? We’ll know soon enough.

Quibi is the high quality short form video platform founded by Hollywood legend Jeffrey Katzenberg. It’s got some of the best people in the industry making short form video series for mobile devices and it’s got a whole lot of investment capital.

Why It Matters

“With all these eight Flixes pumping out $20 billion worth of original programming next year, it’s going to be hard to find something I really want to watch. I wish someone would make some great short form series I could watch on my phone during all those ten minutes breaks I have during the day, the ones where I’m able to devote my full concentration to my phone.”

Said no one ever.

Which is why Quibi looks like a solution in search of a problem. 

But you already knew that. 

You probably also know about the UK study that showed that people mostly watch “How To” style videos on their phones, e.g., How to tie a bow tie, How to change the filter in your refrigerator, how to apply eye shadow, etc.

Those are the sorts of things people want to watch on their phones. That and some borderline “influencer” telling them about her super fabulous day 

Not a five minute episode of the Sopranos.

Which means that rather than than a hot new platform that will help them nab subscribers from Verizon and AT&T, T-Mobile is likely to be left with a big heap of “so what?”

What You Need To Do About It

If you’re making programming from Quibi, maybe think about how you can string it together without breaks. We’re thinking a lot of those shows will make great two or three hour movies and that Quibi can pivot to showing them as such.

On an actual television set.

If you’re the industry, hope that we’re wrong, because a lot of people invested a lot of money in Quibi. (Which has also lost a bunch of key executives as of late.)

If you’re AT&T and Verizon—be happy. Looks like you might have dodged a bullet on this.