Disney Takes The One-App Route, VIZIO Doubles Content Offering
1. Disney Takes The One-App Route
One of the big questions coming out of the news that Disney was taking over full ownership of Hulu was how they would play the merger from a consumer-facing POV.
Basically they had three options—keep the apps separate and sell them as a bundle play, create a single combo app, or both.
On this week’s generally positive earnings call (more on that in a minute), Bob Iger indicated that they would be taking the second route, creating a combo app, a beta version of which will be released next month.
I say “it seems,” because what Iger actually said was “We remain on track to roll out a more unified one-app experience domestically, making extensive general entertainment content available to bundle subscribers via Disney Plus.”
Which could mean anything from “we are not committed to rolling everyone over to the unified app” to “we are going to have the unified app and still keep Disney+ and Hulu for people who only want one” to “we are still figuring out what the ultimate strategy here is, especially Not Domestically.”
I’m going to go with the latter.
Why It Matters
At first glance, it seems as if it makes far more sense to push Disney+ and Hulu together than HBO and Discovery.
And if your goal is to have a single unified brand it is.
But what if your goal is to create something that resembles a full something-for-everyone pay-TV package, only somewhat more curated and on streaming.
Then the Discovery-HBO mashup seems far more logical.
Especially when the follow-up is bringing on news (CNN) and sports (the Bleacher Report-branded add on) which helps to create the “mini-MVPD” aura.
Disney could do this by adding on ESPN and an expanded version of ABC News. Which, I feel compelled to point out, has far higher ratings than any cable news show—David Muir routinely gets around seven to eight million viewers a night, which is around 4X what Fox, the leading cable news service, gets. (And close to 8X what CNN and MSNBC have been seeing.)
That’s not nothing.
It will be interesting to see how Disney brands the new app, if they keep the Disney name (which seems logical) and how that affects Hulu Live TV, which is now the sixth largest pay-TV in the US.
From where I’m sitting, Disney Live TV seems like a winner, the Disney name giving all those reluctant set-top-box ditchers permission to shift their pay TV package to streaming. I mean if it is Disney, how complicated could it be, right?
The Disney name in general is a plus. People have all sorts of good feels about it, which is why the theme parks division plays such a big role in their profitability. And why people outside the US keep subscribing to Disney+, something that also played a big role in their profitability this quarter.
Compare that with WBD and the HBO brand.
It’s become an article of faith among many that changing the name of HBO to Max was foolish, given how beloved they feel the HBO brand is.
But that’s just NASCAR Blindness.
In much of the US, “HBO” was synonymous with “snobby boring shows aimed at people who think they’re better than us.”
Or something to that effect.
Meaning that while the service had been available in its current form for close to 25 years, viewership had plateaued, and while the network was beloved by the Blue State Coastal Elites and the Television Academy, it often got little traction beyond that.
So WBD did the math and realized that if the programming retained the quality HBO was known for then few current HBO subscribers were going to abandon ship—especially if the HBO programming was ensconced in its own network-like sub-brand. Whereas all those people who’d decided that HBO was not speaking to them could be convinced to sign up for “Max” which had Discovery and HGTV programming, more mainstream non-HBO entertainment content, plus news and sports.
So maybe not so dumb of an idea after all.
What You Need To Do About It
If you’re Disney, you need to bucket out your programming into something that feels like the aforementioned “network-like sub-brands” so that subscribers understand the wide range of content options you’ve got going and can find the shows they want to watch.
I’d also throw in ESPN + and an expanded version of ABC News. News and sports are two things Netflix does not have, and as they are your number one rival at the point, that can be a plus.
I’d also create a way for people who get Disney+ for their kids to be able to make sure the kids only watch those G-rated shows. How that works, I’ll leave to you, but the tech should not be all that difficult.
If you’re Google, Disney Live TV could present a real threat to YouTube TV, especially for all those viewers who’ve been on the fence about making the switch to vMVPDs. Just something to think about.
2. VIZIO Doubles Content Offering
VIZIO’s WatchFree+ FAST service announced some notable new acquisition deals this month, which is significant in that it reveals a number of things about the booming FAST market.
To begin with, those deals are with some big name studios— BBC, Paramount and Magnolia.
And while Katherine Pond and her team are to be commended for striking these deals, and for just about doubling the amount of content they have on offer over the course of the past year, they are not alone in FAST-world in terms of bringing on bigger name studios and name brand IP like Star Trek.
Finally, many of these acquisitions are movies, which will live in the On Demand section of the app.
So let’s unpack.
Why It Matters
FAST services are booming and as studios and other rights holders react to the audience shift to streaming, they are becoming far more amenable to striking these sorts of deals.
It’s a long way from just a few years ago when newer OEM-based FASTs were pretty much scooping up anything they could get their hands on.
This “push to quality” means that the whole notion of “anyone can stand up a FAST channel” needs to be re-examined. All of the FASTs are restructuring their content strategy, leaning in on their own curated channels (called “O&Os”) while also bringing on pre-set channels from name brand studios.
That’s bad news for those who have the rights to more obscure programming, and for the false narrative that you can make millions by buying the rights to random content and “standing it up as a FAST channel.”
Those days are gone, if indeed they ever existed.
The second lesson here is that the FAST services have both linear and on-demand elements, that both have sizable audiences and that those audiences have a whole lof of overlap. Meaning that people sometimes like the linear “FAST Channels” because they are easy and low-engagement, and sometimes there’s actually something they want to focus on and watch from the start.
That’s more human nature than business strategy, but it is where the FAST services are heading and so fixating on the linear channel part is only giving you half the picture.
The “push to quality” also opens up an unexpected opportunity in syndication, which would seem to be the logical destination of many of these movies and shows. If they are heading to the various FAST services instead, that leaves local syndication undersupplied, and as (shameless plug) we mentioned in our report on Local TV and Streaming, there’s a feeling that many of the station groups are looking to fill that gap. (With talk shows and judge shows rather than Star Trek movies, but still…)
What You Need To Do About It
If you hold the rights to some well loved programming that is also going to draw viewers in, then the FASTs are calling your name.
Remember that viewers often make up their minds as to whether to return to a particular FAST service based on their first impression, and if that first impression is that there are shows there they want to watch, they will come back.
So you definitely have an advantage there.
If you are one of the FAST services, you are getting close to the point where you need to promote your service and your shows so that consumers see it as an actual brand and not just “the free TV shows that I get with my TV/device.” You’ll need to create an identity and a personality for your brand, but getting to a point where that is an option is no small thing, so kudos.
