1. Discovery Warner To Bundle Up

Surprising absolutely no one, Discovery Warner is planning to offer a bundle of sorts that would combine HBO Max and Discovery+ in advance of creating a new joint app. No word on where the upcoming CNN+ app fits into that equation, but it seems safe to assume it will be a bundle option as well.

And of course none of this will happen before the actual merger goes through, which is expected to happen sometimes early next year.

Why It Matters

Unhappy as it makes some people, bundles are indeed going to be the future. Creating a Discovery/HBO/CNN bundle squarely places DiscoveryWarner in the same “A League” as Disney, whose Disney/Hulu/ESPN bundle also gives viewers a broad range of programming options all for a single price.

(Though to be fair, the Disney bundle which includes their Hulu Live TV vMVPD, is going to appeal to those who want to have their pay TV and streaming too, all in one easy bundle.)

The other piece the Discovery/HBO bundle has going for it is that there isn't a whole lot of overlap between the two services. CEO David Zaslav indicated that “less than half” of Discovery+ subs also subscribe to HBO Max. So a bundle may encourage sampling on both sides and it will likely make for a good family bundle that appeals to everyone’s tastes.

Discovery+ is unique among the Flixes in the type of programming it has on offer. That gives it a very clear identity and makes it easy for viewers to understand Discovery+’s overall value proposition versus its competitors whose “HBO-like” series can make them hard to differentiate.

As for bundling, it’s always going to play well to all parties involved. Consumers like the potential cost savings, the ability to get a single bill and a single interface. Programmers like that they can lock a viewer in for a year or longer which helps reduce churn.

What’s most interesting about the DiscoveryWarner announcement though is the idea of a joint app.

This will help with the big consumer pain point that finding shows on streaming has become. (The process is known as “discovery” but it’s hard to write about discovery on Discovery without confusing everyone, myself included.) By giving viewers a single interface, the joint app will make the DW streaming experience feel more consumer friendly, and quite possibly, like the only streaming service you need.

What You Need To Do About It

If you’re DiscoveryWarner, make sure the new app takes the best of your existing apps, not the worst. That means a lot of consumer research and the ability to customize. I’ll also be curious if you also maintain separate apps. This would seem to make sense as for the Discovery+ audience, the $5/month may well be worth it, whereas a more expensive combo app with HBO may not.

If you’re one of the other Flixes, you’re probably not going to be able to create your own bundles, so if one of the MVPDs or smart TV OEMs approach you with an offer of combining your service with three or four others, you should strongly consider it. Especially if they’ll offer a joint search and discovery interface. It’s your best shot at fighting back against the A league.

If you’re a consumer and you like both Discovery and HBO Max, this is great news for you. You’ll likely wind up paying less and you’ll have one less app to manage and pay for.

2. Sinclair Claims It Has Streaming Sports Rights

Earlier this year Sinclair, which now owns all the former Fox RSNs (regional sports networks) announced what sounded like a very forward thinking plan for those RSNs: they were going to partner with Ballys in order to create streaming apps for each of the RSNs, which would feature betting as a way to keep costs down--rumor was the apps would cost $23/month.

But a few weeks back, MLB Commissioner Rob Manfred said that Sinclair did not have streaming rights nor did they have the right to include sports betting. At which point it looked like Sinclair’s apps were dead.

Things took a surprise turn however, during Sinclair’s Q3 earnings call this week when Sinclair CEO Chris Ripley stated he did in fact have linear and authenticate streaming rights for all the MLB teams in question, as well as direct to consumer (DTC) rights for the four teams Sinclair had renewed. He further claimed that Sinclair would be getting DTC rights from the remaining MLB teams as their deals were renewed.

And that’s just MLB.

Ripley also claimed that Sinclair had “always had”  linear, authenticated streaming and DTC rights for the NHL and NBA teams on its RSNs and that they’d be renewing those rights as well.

And that the apps would be up and running in time for the start of the 2022 MLB season this spring.

Why It Matters

A lot to unpack here.

We had discussed the ins and outs of RSNs just two weeks ago when it looked like the Sinclair apps were dead, but a quick recap:

• RSNs appeal to die-hard fans.

• The rights are very expensive and including them in a cable bundle can drive the price up as much as $25/month.

• They are, however, instrumental in keeping many viewers tied to a pay TV package.

• Who has control of DTC streaming rights--teams or leagues--is an open question.

• Sinclair paid $9.6 billion to buy Fox’s RSNs back in 2019 and it has not been a profitable deal for them thus far, especially after both Hulu Live TV and YouTube TV dropped the RSNs, so the Bally’s agreement was a big deal for them.

When the MLB’s Manfred made his announcement about Sinclair not having rights, many observers took that as a sign the MLB wanted to launch its own app and/or partner with the NBA and NHL on one.

But Sinclair seems set on making their Ballys apps happen.

Many fans would certainly relish the idea of a streaming app as it would allow them to drop their pay TV subscription (raises hand) and the apps would likely include many features other than betting--alternative camera angles, community, live stats and fantasy leagues. just to name a few.

The leagues, however, want to take their future into their own hands and if they were going to choose a partner, it would likely not be Sinclair, the nation’s largest local broadcast affiliate group, which has limited experience in both streaming and sports.

So there’s all that and the fact that Ripley said he thought that adding in rights from Comcast and AT&T’s RSNa made a lot of sense and that they’d need to figure out the right vehicle to do that (consortium, partnership, etc.) 

Meaning more to come.

What You Need To Do About It

If  you’re MLB, the NBA and the NHL, it’s probably time to lawyer up and figure out what exactly your position is and how exactly you are going to respond to this.

If you’re everyone else, get out your popcorn. This is going to be a good one.

If you’re the NFL, be glad you don’t have to deal with RSNs.