Before I get started, I’d like to thank WGN Radio’s John Williams and Producer, Pete Zimmerman for inviting me to appear on WGN's "Wintrust Business Lunch". I had a great time explaining how Lower Tech Bills can save people a lot of money each month on Cellular, Internet and Television bills. John asked some great questions and I’ve received a lot of "Tech Check” requests - a free analysis of household costs in those three areas. If you would like a free look at your bills, email: hmwellsradio@gmail.com or visit lowertechbills.com.
Now on to my post. On Wednesday, February 7th, Disney, Fox and Warner Bros. Discovery made a blockbuster announcement that may change the way many of us watch national sports on TV. Starting this fall, viewers will be able to purchase a sports package which includes all the ESPNs, Fox Sports 1, Fox Sports 2, ABC, TNT, TBS and other channels that showcase sports. It’s all about the companies that produce the programming, jointly getting into the distribution business. And the cable, satellite and streaming services are getting very nervous and angry. That’s because it puts the program suppliers in competition with the companies that bring programming into our homes. In essence, cutting-out the middleman.
None of this was financially possible until high-speed internet became available in most homes. Back in the good-old days, you subscribed to a cable or satellite service and their channels came into your home via a coaxial cable. Then, in 2015, Sling TV and Fubo started streaming multiple channels without a cable/satellite hookup. All you needed was a good internet connection and either a "Smart TV” or a streaming box such as a Chromecast, Firestick or Roku. Soon thereafter, several other multichannel distributors such as DirecTV Stream, Frndly, Hulu + Live TV, Philo and YouTube TV joined the party. While these companies offered various channel line-ups for different monthly costs, they acted very much like your local cable/satellite company. And that’s the way things have been for the last few years with cable and satellite companies losing customers to those disruptive streaming services as more and more people "cut the cord”.
Through it all, there was a sort of an unwritten agreement that the people who made the programs would not get into the distribution business. So, while the cable and satellite companies were at war with the streaming services, at least there was peace in the distribution world…until recently. It began rather harmlessly when the big suppliers, Disney/ABC/Fox (Hulu), Comcast/Universal/NBC (Peacock) and Paramount/Viacom/CBS (Paramount+) started their own streaming services. While that was sort of a warning shot, at least these companies were in competition with each other. Each pretty much stayed within their own company’s programming lane. But that meant over the past few years, consumers have had to subscribe to a myriad of suppliers from the above-mentioned cable, satellite and streaming services to other single channel streamers such as Apple TV+, MGM+, MAX, Netflix, PBS Passport and Prime. It's a literal jungle out there. In fact, I wrote about that very issue a few months ago in a post titled, "Let’s Bundle in the TV Jungle”. Here is a link to that post.
Well, that’s all about to change as the distributors have decided to get in on the action with something called "Direct to Consumer” (DTC) and it seems that Sports is the canary in the coalmine. It actually started with local Sports broadcasting. You may have noticed that last July, Marquee Network (owned by the Cubs and Sinclair) started offering that channel directly to the consumer for $19.99 a month with no other subscription needed. I guess the powers that be decided that if one channel can do it locally, how about several channels going DTC on a national level? And thus, "The Skinny Bundle” is born.
Which brings us back to that February 7th announcement that has shaken the TV distribution world to its foundation. There are still a lot of questions to be answered. I have two. The biggest one is, "How much of a bite off the hand that has always fed the distributors do those distributors want to take?” Meaning that the cable, satellite and multichannel streaming services pay a fee to the ESPNs of the world for each of its subscribers who have access to that channel. If a sports fan can subscribe directly to a service that provides all of the national and local sports channels, maybe they say bye-bye to Comcast, DirecTV or Fubo. On the other hand, if this new skinny bundle is made available for the cable/satellite/streamers to offer to their customers, maybe that will work to everyone’s benefit. But, if it’s only available as a DTC offering, it could mean war. As of this writing, no one knows that answer. My second question is, "What about the other linear networks such as NBC, USA and CBS that offer a lot of sports programming as well as streaming services such as Apple TV+, Netflix and Prime, who are doing their own Sports deals?" If they are not in on this deal, it's not going to be such a bundle of joy for sports fans.
So, as Jack Brickhouse used to say, "Here’s a recap of the game”. The advent of the skinny bundle has arrived with Sports programming being the trial balloon (or did I say canary in the coalmine). Whatever. If it works, can a skinny bundle of news (think CNN, Fox News, MSNBC, CNBC) be far behind? Or skinny bundles featuring lifestyle channels such as A&E, Lifetime, TLC and OWN? In fact, what if we could purchase every single channel DTC? We are definitely moving into unchartered waters.
Back in the day, cable and satellite used to rule the castle. Then the streamers came along and led an invasion into our homes. Now, in just a few short years, the distributors are on the march. One thing I learned through my years in Radio is that technology leads to disruption and that leads to change. As "Old Blue Eyes” sang, "You’re riding high in April and shot down in May.” I guess that’s life.
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