Future Skinny TV Bundles May Get Fatter

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.

4 comments about "Future Skinny TV Bundles May Get Fatter".
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  1. brian ring from ring digital llc, March 29, 2018 at 4 p.m.

    Again, incredibly on point. So many watershed articles Wayne, I love it.

  2. Ed Papazian from Media Dynamics Inc, March 29, 2018 at 6:38 p.m.

    The way things are going, the average SVOD-OTT subscriber household will wind up paying twice as much---or more---for their various TV/video content sources than they now do with those big cable system "bundles" and get fewer channels for the money. It can be argued that there is more of a choice by "cutting the cord", and this is still true to a degree but ultimately bundling in one form or another will remain the norm---like it or not.

  3. James Smith from J. R. Smith Group, March 30, 2018 at 1:08 a.m.

    Agreements with both Wayne and Ed...getting fatter is generally imprudent.  While these OTT bundles have some advantages, like price, they are still bundles packaged by a third party and likely contain a similar percentage of channels even the "skinny" buyer doesn't watch/want.  Video services stand as one of the few sectors in the digital eco-sphere where consumers can't regularly get and pay for only those things they want. They want ala-carte; they can't get it because the industry wants to retain its existing business models...which are showing some serious cracks.

    Both skinny bundles and ala-carte mean some channels will either disappear or move to a more rational long-tail business model (digital) execution. Would that be so terrible?  In most sectors, consolidations and asset sales are normal, hence allowing firms to more fully concentrate on their core business lines (in this case popular/profitable/highly viewed channels).  Does it matter that much that a media conglomerate has 19-20 video channels when at least a few of those are carding a rousing 0.2 or lower average rating?  Even some well known magazine brands have folded their print editions and become digital only.

    Keep an eye on the FAANG gang...they are already major forces in Hollywood, and once they have massive program libraries we could see the traditional TV/video biz in more dire straits.  These digital meglodons seem to not only have mega-deep pockets and more agile organizations, they know what consumers want.

    But, as you might sense, I don't hold strong opinions on such issues (wink).

  4. Ed Papazian from Media Dynamics Inc, March 30, 2018 at 7:56 a.m.

    James, TV has always been a fantastic bargain for advertisers, Even today, with rating erosion and higher CPMs that are demanded, a typical advertiser pays one to two cents per viewer. What's more, commercial impact studies show that even if half of the "viewers" have left the room or paid no attention to the ad. the net effect against all of the "viewers" is a short term brand purchase intention lift of 5-6%---and this is just a normative finding. How does that compare to your typical digital search  pricing scenario?

    My point is that it's up to the media sellers to determine the value of their audience to advertisers.TV started out as a low ball---very cost efficient----audience getter for advertisers at a time when it was the only game in town. Perhaps now that there is competition from digital media, it's time for TV ad sellers to rethink their pricing. One of our new "Alerts", which go to "TV Dimensions 2018" subscribers, will shortly deal with this issue and postulate what may come next.

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