1. Hulu and YouTube vMVPDs are surging
Bloomberg reports that the two popular kids in the vMVPD clique are Hulu Live TV and YouTube TV, with subscriber numbers now reaching two million and one million respectively. That makes Hulu the number two vMVPD, within striking distance of Sling, which has 2.4MM subscribers and ahead of DirecTV Now, which has just 1.6MM.
Why It Matters
Despite being in the lead, Sling just cut its prices considerably, lopping a whopping 40% off its top-tier package.
Unfortunately, I’m not sure that’s going to be enough to get most viewers past the fact that they don’t have deals with either CBS or ABC.
Hulu and YouTube both have deals with all four major broadcast networks, but beyond that, they have (as I might have mentioned in the afore-linked Bloomberg piece) several other key things going for them.
One, they both have really nice looking, easy to manage interfaces. Hulu, in particular has a very elegant interface that’s library-based, not time-based.
Which, in practical terms, means that it’s learned I like watching Brooklyn Nets games and so that will be the first thing I see when I log in if there’s a game on. Or that the Oscars were front and center when I logged in last Sunday night, since that’s what most people were going to watch. No searching out channels or scrolling through the grid to find channel 507.
In addition to interface beauty, both Hulu and YouTube offer consumers a single product at a single price. Compare that to Sling and DTVN where there are two varieties of Sling (“Orange” and “Blue”, which tell me nothing) plus a combo version, while DTVN is serving up at least four different options at different price points along with something called “Watch” that’s even cheaper.
But the biggest thing Hulu and YouTube have going for them is that they’re not associated with an MVPD, but rather, with a digital-first company that people seem to actually like. Sling and DirecTV Now can’t help but come off as old school TV given their association with Dish and AT&T respectively. And given how much Americans love “cable companies” … not a positive.
There’s also the fact that while vMVPDs are not in fact cord “cutting” but rather cord “shifting” (you’re getting the same service only via a digital connection as opposed to a cable or satellite connection), getting your TV from a digital company like Hulu or YouTube feels much more radical and cord-cutter-ish than getting it from a traditional company like AT&T, Dish or even Sony.
So there’s that too.
What You Need To Do About It
If you’re Sling and DTVN, you may want to get to work on your interface and simplify your pricing plans.
If you’re an MVPD you might want to ask yourself why you haven’t launched your own vMVPD yet. Yes there is a danger it might cannibalize your existing business. But at the rate the vMVPDs are growing, you’re basically handing your customers over to them anyway. Time to fight back.
If you’re any of the vMVPDs, start thinking about a super-skinny bundle option. Broadcast channels only skinny. Because once the Flixcopalypse happens, we suspect that’s all the live TV a sizeable number of people are going to want.
2. AT&T Brings Merger Realness
Now that the Justice Department has lost its last-ditch attempt at stopping the AT&T-Time Warner merger, things are getting real up at Columbus Circle.
Richard Plepler who is famous, it seems, both for turning HBO into a serious creative powerhouse and for being tan, is out, as is David Levy, the president of Turner. Former NBCU exec Bob Greenblatt will be taking over as head of a combined HBO/Turner/Warnerflix and former wunderkind Jeff Zucker, who runs CNN, is allegedly expanding his domain to include sports as well.
Why It Matters
Mergers don’t work unless you actually, you know, merge the companies.
So it was only a matter of time before things started getting real.
If AT&T is betting the house on the fact that HBO-on-Steroids can beat Netflix, then they need someone who believes in the power of HBO-on-Steroids.
It’s a very good sign that they turned to an experienced TV executive like Bob Greenblatt though. All too often, non-TV companies have put people in place who don’t have any real experience in television and the results have been disastrous.
AT&T needs to figure out what its four disparate properties are going to look like when they’re joined together and what the pitch is for consumers. Talking about data and Xandr and all that is great, but that’s what the industry is getting out of the deal. AT&T needs to figure out what’s in it for consumers and why they’d want to subscribe.
What You Need To Do About It
If you’re Bob Greenblatt and Jeff Zucker, you need to do what you can to talk AT&T out of that confusing three-tier plan they’ve been floating. Being a phone company, AT&T loves tiers, but that can only end in tears (see what I did there) as consumers wind up confused and flock to the services that have one completely non-confusing offering.
(If nothing else, it makes marketing the new product three times more difficult.)
If you’re the rest of the industry, especially the other Flixes, just get the popcorn, sit back and wait to see how this all plays out, if AT&T gets out of the way to let the people they hired do what they hired them for, and all that usual post-merger drama.