Rebecca Day

Among predictions from a co-founder of a new prepaid virtual MVPD is that "social TV is here to stay.” Polls and memes, like so-called watch parties, are part of social TV, said Vidgo President Shane Cannon. In an increasingly crowded media segment that continues to steal share from traditional pay TV (see 2103310055), more than 120 million consumers have subscribed to skinny bundles, said Cannon, whose company provides such content. Cannon expects that number to “pick up steam” over the rest of 2021, as live TV streaming becomes “the preferred way to watch” among younger viewers who want to pick their own content. Betting via sports channels makes "a lot of sense,” Cannon said Wednesday, noting sports betting is best served on multiple devices. A top challenge for streaming services is “how to get Gen Z to pay for content,” he told a Parks Associates virtual conference: Ad-based VOD is widening the gap, giving the segment a way to get content without paying. Vidgo believes the best way to lure Gen Z is through live sports and news -- content that doesn’t get to AVOD platforms.

While growing, virtual MVPDs face some of the same challenges as their traditional pay-TV rivals, many of which are losing video subscribers, a Parks Associates webcast heard Wednesday. Rising content costs lead vMVPDs to raise prices, said Parks' Paul Erickson. By 2023, vMVPD subs will be higher than telco and satellite pay TV combined, behind cable TV, the analyst said. In a competitive sector, Erickson said vMVPDs are riding the popularity of over-the-top video services and need unique propositions amid a growing number of rivals. Churn is a major challenge for vMVPDs, which lack customer contracts, said Erickson: Subscription duration averaged a year to 15 months for Dish Network's Sling (16 months), AT&T Now (15), Alphabet's YouTubeTV (15), Disney's Hulu + Live TV (14), AT&T WatchTV (12) and T-Mobile TVision Home (8). Since Parks' survey, AT&T announced it's spinning off DirecTV (see 2103010046), and T-Mobile shut down its TVision OTT service this week, six months after launch, instead partnering with Google and making YouTubeTV its preferred live TV offering.

Studios have fallen into “lockstep pursuit down the subscription streaming dream,” said CEO John Calkins from transactional over-the-top video platform company Row8. The current direct-to-consumer trend, driven by theater closures during the pandemic, “is a profit deal” for media companies, said Wedbush's Michael Pachter. Also speaking Wednesday at the virtual Digital Entertainment Group Expo, the analyst compared the rush to D2C services to the Steve Martin movie, The Jerk: “It’s all about giving away a bunch of crap and hoping people will pay for it.” Calkins said “everybody’s feeling like they’ve got a shot at that brass ring.” He questioned whether the model is valid or sustainable long term. When the “newness of subscription streaming wears off,” there could be a “day of reckoning,” he said. Pachter said most TV content doesn’t have to be viewed live, aside from sports and certain shows where immediacy is important. The analyst believes virtual MVPD services such as YouTube Red or fuboTV “will take over, and cable is doomed.” Pachter blamed the cable industry for allowing Netflix deals, saying it “cut its own throat.” Consumers “have been trained that you can just watch anything you want on demand,” he said. “People are pissed” when they have to wait a week to watch the next episode of a show like WandaVision from broadcast TV “because we’ve all been trained to expect to binge it.” NCTA didn’t comment Thursday. Calkins noted “some stall” in vMVPD subscriptions and that prices keep “creeping up,” making the streaming model not much different from traditional pay-TV. On what will drive success for vMVPDs, Pachter said content owners should “get religion and decide they can’t afford to give content away” and “just withhold it from all these people.” Also at the event, Pachter took aim at AT&T (see 2103250063).

A stock analyst slammed AT&T's chief and the cable industry, partly over streaming. Warner Bros' decision to release its 2021 film slate simultaneously to theaters and its HBO Max subscription VOD service was an “overcommitment,” Wedbush's Michael Pachter told a virtual Digital Entertainment Group Expo Wednesday. “AT&T bit off way more than they could chew when they bought Time-Warner.” Pachter said the media company is “trying to package HBO Max and sell it and maybe later sell the studio.” AT&T is trying to shore up the value of HBO Max “because they think they’re going to get a Netflix multiple on that,” he said. The company is making "bad decisions for the creatives,” he said, trying to maximize profit for the content "by shoving it onto HBO Max.” Taking a swipe at AT&T CEO John Stankey, Pachter said, "It’s hard to get in the head of somebody who actually doesn’t know what they’re doing,” saying the former WarnerMedia CEO is “in way over his head.” Stankey didn’t respond to a request for comment Thursday. Studios have fallen into “lockstep pursuit down the subscription streaming dream,” another executive told the conference (see 2103250067).

Despite a 30%-plus jump in video streaming in 2020 as consumers ratcheted up viewing during stay-at-home orders, there’s a large revenue opportunity in transactional video, Studio Distribution Services President Eddie Cunningham told a virtual Digital Entertainment Group Expo Wednesday. “Of course there’s room for physical still at the table,” said Cunningham, acknowledging that the segment won't drive growth for the entertainment industry over the next 10 years. Studios will follow the consumer and “get content out in front of eyeballs in terms of how consumers want to consume that,” said the executive. Attention to electronic sell-though, subscription VOD, ad-based VOD and premium VOD is understandable, given growth in streaming, and physical is a “huge, important part of the mix," he said. Physical video disc sales were $7 billion globally in 2020, Cunningham said. “It’s still going to be important to the industry for a long time.” The SDS 10-year joint venture was announced last year to distribute discs for new releases, library titles and TV shows, along with marketing initiatives, in the U.S. and Canada. The JV of Universal Pictures and Warner Media launches early next month.

Consumers who do primary grocery shopping in store vs. online inched up to 71.5% from 71.2% a month ago, Resonate reported Tuesday of a survey fielded Feb. 22-March 10, after 107 million COVID-19 vaccines were administered. The in-store grocery portion rose from 68.6% in December and 61.9% in June. Just over 24% of respondents would buy electronics in store vs. online, up from 18.8% in August. Some 55% aren't going to crowded activities such as movie theaters or concerts until the coronavirus is under control.

Some 70% of U.S. households have a smart device, said Menno Koopmans, Universal Electronics Inc. senior vice president-global sales and marketing. They tend to be in different categories, creating a “fragmented” market, she told a Friday event. The key to the smart home succeeding is interoperability, Koopmans said: It's the next frontier for UEI. The company developed an Apple TV program for MVPDs built around that streaming player, and it wants to do more, said Koopmans. Colliers analyst Steven Frankel wrote investors Monday that the company is positioned to benefit from new offerings such as its Apple TV 4K remote.

Amazon’s getting NFL long-term media rights distribution agreements is a “big win” for the tech giant, LightShed Partners wrote investors Friday. The long-term media distribution rights agreements with Amazon, CBS, ESPN/ABC, Fox and NBC cover 2023 through 2033, said the NFL Thursday. Amazon will be the “exclusive home of Thursday Night Football across hundreds of compatible digital devices,” said the league. LightShed called it “the day the multichannel TV bundle died.” The trajectory is clear, the analysts said, “and the proverbial ‘floor’ on multichannel video subscribers is far lower" than the 40 million-50 million LightShed had predicted due to the NFL. That’s now closer to 20 million, “as more and more marquee sports content (especially NFL content) becomes available outside the legacy multichannel bundle,” analysts said. With games on Amazon Prime Video, ESPN+, Paramount+, Peacock and Fox digital platforms -- in addition to NFL Mobile and digital platforms -- NFL games “are now available in more places and on more devices than ever before,” said the league. It said it continues to be “the only sports league that delivers all of its games" on free, over-the-air TV, while noting increased flexibility to watch Sunday and Monday night games. The pact sets the stage for Fox, the only major network without a subscription VOD service, to launch a subscription tier on Tubi that includes NFL programming, LightShed said. Citing the acceleration of cord cutting and legacy media’s “urgency to build their own streaming services and connected TV advertising presence,” LightShed expects all media companies to employ their simulcast streaming rights “sooner than later.” MoffettNathanson analyst Michael Nathanson agrees the distribution deals could accelerate cord cutting, he wrote investors Friday. He said the NFL is likely receiving about $10 billion a year, a sharp step up from the $5.6 billion now for the U.S. rights, with those higher NFL costs will likely mean higher affiliate fees being charged to distributors and local affiliates, leading to higher consumer prices. ACA Connects deems the distribution agreements bad news for cable subscribers, it said Friday. Broadcast networks and TV station owners will use NFL games and the threat of blackouts as leverage to drive up retransmission consent fees, it said, It applauded the reintroduction of the Modern Television Act by Rep. Anna Eshoo, D-Calif., and House Minority Whip Steve Scalise, R-La. (see 2103110064). The bill would repeal parts of the 1992 Cable Act, including retransmission rules.

Discovery and monetization are challenges that streaming sports services face in the post-pandemic world, a Brightcove webinar was told Thursday. Even as fans turned to watching shows about sports in the absence of live sports, streamers, too, had a decline in time spent watching sports content, said Brightcove analyst Jim O’Neill. As live sports reemerged in the second half of 2020, more viewers turned to streaming, while traditional sports TV ratings flagged. “Traditional delivery of content, including sports, is being challenged" by desires to cut pay-TV costs and rising adoption of over-the-top video services, he said. The pandemic forced golf's U.S. Open from its familiar June slot to September, where it competed with other professional sports. “Nobody wants to go up against the NFL,” said Amanda Weiner, U.S. Golf Association senior director-digital media and ticketing. USGA's biggest challenge last year was losing the “at-work audience” that would sneak a second screen at work to watch, Weiner said. USGA launched its streaming app on Roku and Apple TV, adding Amazon Fire TV last year, to reach people "where they were," said Weiner. She said more is in the works. Livestreaming has become a critical way for USA Volleyball to reach fans amid spectator restrictions, said Chief Marketing Officer Kassidi Gilgenast. It’s a big change “to get our fans to the small screen,” said Gilgenast. USA Volleyball tried its hand at in-house streaming a few years ago but realized it needed partners, Gilgenast said. By providing a link that takes people directly to a match livestream, "we’re much more likely to convert that user, especially on the social side, to a viewer.”

The pandemic forced companies “to simultaneously transform multiple parts" and "reskill" staff in what would have been "sequential programs,” said Accenture CEO Julie Sweet on a fiscal Q2 call Thursday. The quarter that ended Feb. 28 had a return “to pre-COVID-level financial results a quarter earlier than we expected," she said. Revenue increased 8% to $12.1 billion. COVID-19 “hit a giant fast-forward button to the future,” Sweet said. “Demand to innovate at unprecedented speed and scale with rapid adoption of cloud, AI and other disruptive technologies, is accelerating.” And “digital laggards" are "determined to not simply catch up, but to leapfrog” their rivals, she said. “The move from approximately 20% to 80% in the cloud alone is a huge undertaking, and it is just the start, as companies will then continue to invest to grow and innovate on their new cloud foundations.”