Will your skinny TV bundle put on weight as it grows?
New live digital linear TV services, such as Dish Network’s Sling TV and others, have made it a point to remain thin and price-effective. How? They don't take every network in a TV group -- say, 10 to 20 channels or more -- to keep the fees down for price-conscious consumers.
The goal is to spend some money for big viewing networks, but save on avoiding affiliate fees for lower-level channels.
This argument came to light when Warren Schlichting, executive vice president, Dish Network/group president for Sling TV, gave testimony for the Department of Justice case against the proposed AT&T-Time Warner merger.
Schlichting says Dish didn’t take all of Turner cable networks for its Sling TV service. TBS, TNT, CNN, truTV and Cartoon Network would be enough, but Turner Classic Movies, Adult Swim and Boomerang were not necessary.
"Fat" is the model traditional TV distributors and TV networks have settled on — with an average monthly consumer price anywhere from $90 to $150, depending on the package.
It's pretty much all or nothing. So Viacom, with around 20 networks, and Discovery (now with Scripps) just under 19 channels, could get virtually all their networks on board. Shelf space efforts would be achieved.
But now, Viacom has realized it needs to focus on key network players going forward. It can’t be greedy. Last year, under the leadership of CEO Bob Bakish, the six key TV brands were Nickelodeon, MTV, VH1, Comedy Central, BET and Paramount Network.
The coming model of new TV network services isn't going to include every single TV brand. TV networks have to make up money in different ways. That means less commercials, but perhaps higher prices for marketers looking for a clearer advertising environment, as well as new, advanced advertising/branded entertainment opportunities.
Dish Network’s Schlichting may not believe all this. A different kind of TV network group leverage -- AT&T-Time Warner for example -- might change the world of skinny TV. Maybe Turner will push for all eight networks to be on Sling TV. And if that doesn’t happen, perhaps it would shift everything to its live, linear digital sister TV distributor, DirecTV Now.
"It's easy to imagine someone with this clout saying you need to take all eight," said Schlichting. "That breaks our model."
Skinny would get fat.