The Other Pay-TV Bundle

Hulu’s virtual pay-TV service went live in selected cities this week, offering a basic bundle of 60 channels for $40 a month ($73 a month with enhanced DVR capability). The launch, still officially in beta, brings to six the number of live, multichannel over-the-top services now available, including DirecTV Now, Sling TV, Playstation Vue, YouTube TV, and Fubo TV. More are likely on the way.

But while Hulu was rolling out, many traditional pay-TV providers were rolling over. According to an analysis by MoffettNathanson analyst Craig Moffett, based on publicly reported results and estimated results for privately held companies, traditional pay-TV providers collectively lost at least 762,000 video subscribers in the first quarter of 2017, more than five times their losses in the same period last year.

“For the better part of fifteen years, pundits have predicted that cord-cutting was the future. Well, the future has arrived,”  Moffett wrote in his latest quarterly overview of the industry. “It leaves the Pay TV subscriber universe shrinking at its worst ever annual rate of decline (-2.4%). And it was the worst ever accelerate in the rate of decline (60 bps).”

The news spooked investors, who sent shares of media companies tumbling. Read More »

From Fake News to Real Murder: Facebook’s Incentive Problem

Fake news did not originate with Facebook, nor with the 2016 presidential campaign. Planting damaging stories of dubious provenance about a political opponent in the newspaper  is a tradition nearly as old as newspapering itself. And spreading false rumors is as old as human society.

But as we saw in last year’s election, Facebook and other social media platforms have elevated merely spurious information into a weapon of mass dysfunction. During the final three months of the 2016 campaign, the top 20 fake news stories circulating on Facebook racked up 8,711,000 shares, reactions, and comments on the platform, including such classics as “Pope Endorses Donald Trump” (960,000), and “FBI Agent Suspected in Hillary Email Leaks Found Dead in Apparent Murder-Suicide” (560,000).

BuzzFeed, which compiled those data, notes that those 20 fake stories attracted nearly 1.5 million more instances of engagement than the 20 top-performing stories 19 major news outlets over the same period. But the issue here isn’t so much real vs. fake but the role that Facebook’s massive scale played in encouraging the production of fake stories. Read More »

The Net Neutrality Paradox

One of the more unfortunate wrinkles in the long debate leading up to the Federal Communications Commission’s 2015 Open Internet Order, better known as net neutrality, was its increasingly commercial focus. There were important civil liberties issues at stake, to say nothing of the interplay of engineering and regulation of critical infrastructure and the private ownership of public goods. But much of the public debate boiled down to an argument over streaming — Netflix streaming in particular.

That was due in no small part to the efforts of Netflix founder and CEO, Reed Hastings, who made himself and his company the poster-children of the net neutrality cause by loudly proclaiming Netflix’s oppression at the hands of ISPs looking to impose interconnection fees on the streaming service.

Although net neutrality proponents eagerly embraced Netflix’s cause and Hastings’ pubic advocacy they worked to color the issue as essentially a commercial dispute between different types of service providers, which, paradoxically, is actually an argument against what the FCC did. Disputes between buyers and sellers are not really the FCC’s bailiwick; that’s more a matter for the Federal Trade Commission and the antitrust division of the Justice Department. Read More »

Amazon in Good Field Position After NFL Deal

Amazon won the auction for live-streaming rights to this season’s Thursday Night Football franchise with a bid of $50 million dollars for a package of 10 games. That’s 5 times what Twitter paid last year for essentially the same deal: Amazon will share the games with NBC and CBS and will stream the networks’ feeds, including their ads. Amazon will also be able to sell a handful of ads per game itself.

The games will be available for free to Amazon Prime members.

Although the 5X increase in price is impressive — and was probably too rich for Twitter — $50 million is still pretty small beans, both for the league — whose deals with the broadcast networks run into the billions — and for Amazon, which has $20 billion on its balance sheet. For both, it’s largely an add-on business at this point.

For the NFL, streaming is still largely an experiment aimed at finding a way to reach cord-cutters and out-of-home viewers, and to test the viewership waters outside the U.S., not to supplant its traditional broadcast deals. For Amazon, the NFL deal is a way to enhance the value of a Prime subscription and to attract to new subscribers at a relatively modest price. Read More »

NBC, Rio, And the Long-Term Value of Televised Sports

NBC’s Olympic efforts in Rio are falling short of its previous best. Through the first 10 days of the games, the broadcaster’s prime time coverage has averaged 27.8 million viewers, according to Nielsen. That’s more than enough to trounce CBS, ABC, and Fox, but it’s down 17 percent from NBC’s coverage of the 2012 games in London, despite a more favorable time zone that allowed for high-profile events where American’s typically excel, like swimming, to be shown live in prime time.

usain_bolt_smileThe fall off among viewers 18-34 has been even steeper, down 25 percent from London.

NBC execs are quick to point out that the ratings for its prime time coverage on its broadcast channel don’t tell the whole story. NBC Universal is showcasing the games live across its entire suite of cable networks throughout the day, some of which have drawn strong ratings in their own right. The final of the men’s golf competition, shown live on NBCU’s Golf Channel on Sunday, delivered the second highest ratings for any 90 minutes of televised golf this year after the final round of the Masters, despite the absence of many high-profile players. Between noon ET when it started, and 3:10 p.m. when it ended, the competition earned the highest household rating (1.02, with 1.6 million viewers) since Tiger Woods and Phil Mickelson went head to head at Pebble Beach in 2012. Go figure.

NBC also points to record-breaking digital viewership of this year’s games. Through Aug. 14th, NBC had delivered 1.86 billion live-streaming minutes, besting the total from the last three Olympics combined by more than 25 percent. NBC is live-streaming all the events in Rio as well as simulcasting it’s prime time coverage. Read More »