1. Why CBS/Viacom Merger Makes Sense

CBS and Viacom merged last week while I was on vacation, you can see my quick take on it via this clip from Cheddar.

Why It Matters

Here’s a longer look at why this promises to be such good move.

All that library content. A lot of observers surprisingly seem to forget just how popular Nickelodeon was in the 90s and 00s and how many Office/Friends like hits they have in their library: SpongeBob SquarePants, iCarly, Victorious (from whence Arianna Grande sprang), Rugrats, Phineas & Ferb, Ren & Stimpy, Drake & Josh, Kenan & Kel (from whence SNL’s Kenan Thompson sprang), Wild Thornberrys, Angry Beavers… it’s a pretty lengthy list and it's all going to be nostalgia TV for younger Millennials/older Gen Zs and many of their parents (RAISES HAND).

That’s just Nick.

There’s also a whole world of deep library content on MTV (all those seasons of The Real World), VH1 (Behind The Music), Comedy Central (South Park, Key & Peele, Broad City), BET (15 seasons of 106 & Park) and all those Paramount movies.

Then you’ve got all of CBS’s 60+ year library plus all of Showtime’s library.

That’s a whole lot of shows that people will want to watch, or at least will make them think that a subscription is worth it because they could see themselves watching those shows over some random Netflix originals.

Which is why I am doing a whole lot of SMHing when I see Wall Street analysts who probably make a whole lot of money (the Half Million Dollar Men) saying things like “well VCBS will only have ten thousand shows in their library.” 

Because clearly it’s the number of shows that get people to subscribe, not the actual shows themselves.

SMH again.

(This is, of course, after they comment on how the mythical “massive wave of cord cutting” has impacted Viacom in a negative way.)

All that tech. This is something else that gets swept under the rug, but VCBS has had plenty of time to iron out all the tech kinks on CBS All Access, the Showtime app and Pluto. Meaning that whatever app (apps?) they have are not going to crash.

That’s another thing the Half Million Dollar Men keep glossing over: you can have the best programming ever, but if your app crashes daily, then people are going to stop watching. In fact, a huge part of Netflix’s success is due to the emphasis they placed on tech, on getting their app to work flawlessly, even publishing lists of which broadband providers provided the best streaming experience.

Linear. We are big believers in the return of linear thanks to Decision Paralysis. It’s something I wrote about in my book Over The Top, in the chapter on the “Spotifyization” of television. 

The basic premise is that when consumers have so many choices, making a decision becomes a chore and they are often happy to let the app choose for them, provided those choices are within the range of acceptable. Hence the popularity of Spotify’s Daily Mixes, playlists and Daily Drive features. 

VCBS already has some experience with this with Pluto, which has created a number of linear streams, and we can see them easily creating more, even down to a CSI channel or South Park channel, something that could give them a real advantage as the Flixcopalypse plays out.

What You Need To Do About It

If you’re a rival network about to launch a Flix, don’t underestimate VCBS. They’ve got the goods, and there’s a strong chance they’ll be able to deliver on them.

If you’re a viewer, this should be a really good Flix to add to your list.

If you’re an analyst or observer, there’s a lot to pay attention to over the next several months, particularly around how VCBS’s OTT strategy will play out: will they create a single app, offer CBS All Access, Showtime and Pluto as a Disneyesque bundle or something in between?

If you’re an advertiser or ad agency, download our Special Report on Ad Supported OTT. Because whatever Bob Bakish does about OTT, there’s going to be a whole lot more OTT ad inventory available, along with viewers watching the shows that inventory appears on and so you're going to want to understand how that all works. (And be sure to keep an eye out for our upcoming Special Report on Addressable TV Advertising too.)

If you’re the industry, you need to get your act in gear and start working together, so that buying and selling OTT inventory isn’t quite so painful.

2. Why Apple’s $9.99 Price Tag Does Not Make Sense

Apple announced that their new Apple Plus TV service would sell for $9.99/month. The service will have a number of series from top names like Stephen Spielberg, Oprah Winfrey, Reese Witherspoon and Jennifer Aniston.

But it won’t have any library content. (At least that we know of.)

And that’s a problem.

Why It Matters

People don’t pay $10/month every month to subscribe to TV services just to watch a few series.

They subscribe because they think they’ll watch a lot of different shows, and that there will be things to watch other than the one or two series that initially catch their interest.

That’s why HBO has such an extensive movie selection in addition to its original series.

And why every other Flix has tens of thousands of hours of programming.

Not because people will actually watch all those movies and TV shows.

But because it creates the perception of value.

So to be clear, plenty of people will subscribe to the Apple service for a month if there’s a show they really, really want to see. (They'll pay $10 to watch a movie, so chances are they’ll be willing to pay $10 to watch a ten-episode TV series.)

But that’s it—once they’re done, they’re going to hit the “unsubscribe” button faster than you can say “Steve Wozniak.”

Now Apple still has time to remedy this. They can buy Tubi or Xumo or another FAST. Given that they’ve got about a quarter trillion dollars in cash, they could even buy VCBS or Disney or Lionsgate. (Provided the DOJ and FCC let them.)

But they probably won’t.

For the same reason they haven’t rolled out an Apple TV stick to compete with Amazon and Roku. (Though they are allegedly rolling out a lower priced HomePod to compete with Amazon and Google. Two years too late to do any real damage to those brands, but at least it’s a start…)

Now mind you this is in no way fatal—the billion they are spending on Apple TV+ can be looked at as part of their marketing budget—and they can use it to promote their other products. It’s just that it’s largely unnecessary. They could have made Apple TV+ so much more.

What You Need To Do About It

If you’re one of the other Flixes, be glad that you have one less company to worry about in terms of subscription dollars. 

If you’re a consumer, don’t forget to unsubscribe when you’re done watching that one show on Apple TV.

If you’re Tim Cook, TV[R]EV is happy to talk to you to help figure out how to get your act together around TV. Because we're big fans of Apple and we want to see you win.