Well, this is interesting: NBC Universal is working on a comedy video subscription service, according to a report from the Wall Street Journal. The service, which could launch later this year, would include full episodes of shows like the Tonight Show with Jimmy Fallon and Saturday Night Live, as well as other clips and online-exclusive programming, and possibly cost $2.50 to $3.50. Lots of details still seem up in the air, but it looks like NBC is determined to join the unbundling crowd to finally make money from cord cutters.
Nickelodeon may be next to join the unbundling frenzy: Viacom CEO Philippe Dauman revealed during an earnings call Thursday that his company is looking to launch a paid streaming service with Nickelodeon programming that will be heavily mobile-focused, according to Reuters. Dauman didn’t share any additional details, but said that Viacom will have more to announce next month.
There are two ways to look at Sling TV, the new internet-based TV service that will be announced by Dish on Monday at CES: It’s either a poor replacement of what cable has to offer, lacking even basic programming. Or it’s finally a way for cord cutters who don’t want to give up on sports to get ESPN live streaming, plus a few extra stations, for just $20 a month.
[company]Dish[/company] revealed not only the service’s name but also key details on programming and price: The base package, which will cost consumers $20 a month, includes live access to ESPN and ESPN2, as well as a couple of other cable networks, including Disney Channel, ABC Family, Food Network, HGTV, Travel Channel, TNT, CNN, TBS, Cartoon Network and Adult Swim. Consumers will also be able to add additional packages, including for news programming, family content and sports, for five dollars each. Sling TV will launch before the end of January, and is already in private beta test with select customers.
Sling TV will be available over the internet, and consumers will be able to watch the service on the web as well as via Roku, Fire TV, Android TV and Xbox One as well as iOS and Android. Chromecast and Apple TV are notably absent from the list, but Sling TV executives told me during a recent interview that they plan to add additional devices in the near future. Most, but not all channels offer DVR-like pause, rewind and fast forward features. And consumers will be able to access some shows up to three days after they air — but there are once again limits dictated by the contracts that Dish has with TV networks.
Sling TV: Not like any other TV service
Dish is not the only company looking to launch an internet-based TV service. Intel tried the same thing with its OnCue service, but eventually gave up on the idea and sold OnCue’s assets to Verizon. Sony announced its own internet-based TV service at CES in Las Vegas a year ago, and began limited tests of the service late last year. But Sony’s approach is very different from Dish’s: The PlayStation maker has been busy signing deals for big bundles, like the one with Viacom that will bring a total of 22 channels to Sony’s TV service, including not only popular networks like Comedy Central but also little-watched properties like VH1 Soul and Palladia.
“That type of deal that Sony signed with them is not a deal that we would do,” said Sling TV CEO Roger Lynch during a recent interview. He added that Comedy Central content is already “widely distributed,” with consumers being able to watch shows like the Daily Show on the show’s website or on Hulu.
[pullquote person=”Roger Lynch” attribution=”Roger Lynch, CEO, Sling TV” id=”903979″]“ESPN is an anchor.”[/pullquote]
Lynch maintained that the same is true for broadcast networks like Fox or CBS, which Sling TV doesn’t carry. Consumers can access their feeds with an antenna, or catch up on shows on Hulu or elsewhere, he argued, adding: “The fact is that they are already watching it.” Lynch said that Sling TV may add a broadcast tier “over time,” offering consumers to stream content from broadcaster for an extra fee. “We don’t want to force everyone to buy them,” he said.
Instead, Sling TV is betting that all of its customers want access to ESPN, which is the service’s crown jewel at launch. Or, as Lynch put it: “ESPN is an anchor.”
That’s an interesting bet, because it could actually work: Sports has been the deal-breaker for many would-be cord cutters, who just hold on to their $100-a-month cable bill because they don’t want to miss their team’s games. With Sling TV, they may now get what they want for just 20 bucks a month. Plus, the basic tier also comes with access to some content from WatchESPN, the sportscaster’s online video service. Specifically, Sling TV subscribers will have access to the ESPN1, ESPN2 and ESPN3 through the WatchESPN app.
DishWorld will be folded into Sling TV
The move towards new online distribution models doesn’t come out of the blue for Dish. The company acquired online video platform provider Move Networks five years ago, and used the Move team to build out its own online team. That team actually launched a first online TV service in early 2013: DishWorld provides expats in the U.S. with access to live TV networks from countries like India, Brazil or Vietnam.
Lynch told me that it’s been a success for the company, helping to grow the audience for international channels, which were previously only available as part of Dish’s service, threefold. He didn’t reveal any subscriber numbers, but said that consumers who do pay for international TV stations through Dishworld watch over five hours of programming via the service every day on average.
Dishworld is currently run by a team of 250 people, and Lynch said that the company plans to staff up in the coming months. “It’s in a way our big beta,” he said. It’s worth noting that this beta test is now over: DishWorld is going to be folded into Sling TV and rebranded as Sling International.
Is Dish suddenly a cord cutter’s best friend?
So will Sling TV eat into Dish’s traditional subscriber base? Lynch and the service’s Chief Marketing Officer Glenn Eisen insisted that won’t be the case, with Eisen telling me Sling TV is a separate business unit with the company that goes after a different set of customers. The service targets people who already have cut the cord, and what he called cord-haters: “Psychologically, they have already cut the cord.”
That’s nice rhetoric, but it doesn’t hide the fact that Dish is in the long run just as vulnerable as cable. The TV industry has seen a small but notable decline of subscribers in recent quarters, but online viewing has grown rapidly at the same time, suggesting that there may be more radical changes of consumption patterns ahead. Quizzed about this, Eisen and Lynch told me that Dish was cognizant of these shifts, but also optimistic that the industry could return to growth by embracing new models. Said Eisen: “If we care about growing the market, then we had to pivot.”
This post was updated throughout at 12:30pm with additional details shared during Dish’s CES press conference. It was updated again at 2:31pm and 4:28pm to clarify how much WatchESPN is part of Sling TV.
Next up to jump on the unbundling bandwagon may be Starz: The premium cable channel is planning to launch an online-only subscription service in international markets over the coming months, and Starz CEO Chris Albrecht suggested during the company’s earnings call Thursday that it will likely do the same in the U.S. “I don’t think it cannibalizes the existing business. It is a way to innovate and create real value,” he said, according to Variety. Albrecht’s remarks come after HBO, CBS and Univision all announced their own unbundling plans.
Not so long ago, people argued that HBO wasn’t going to unbundle anytime soon, or ever. So what changed?
It’s unbundling time! Univision is the latest broadcaster to announce that it plans to stream videos to customers that don’t have a pay TV subscription.
CBS is the next network that is offering cord cutters a way to subscribe to its programming without paying for cable. However, live streams are limited to certain markets.
Consumers increasingly are willing and able to assemble their own, a la carte TV bundles, through a mixture of traditional and OTT channels, while eschewing pre-packaged bundles dictated by the networks.
Sick of the big cable bundle? Luckily, the number of alternatives are growing — and some are coming from the very people who say the bundle isn’t going away.
William James once observed (although I can’t find the reference),
You can judge a man’s intelligence by how well he agrees with you.
This post is about some recent thoughts by two very smart people, by that measure. Williams also stated that
Our view of the world is truly shaped by what we decide to hear.
Which is presumably why you are reading this post in the first place, and why I read nearly everything by Fred Wilson and Benedict Evans.
Fred Wilson spoke recently at Le Web in Paris, and laid out three megatrends that his venture firm, Union Square Ventures, follows closely and which guide their investment philosophy. Niv Dror was there and captured his talk. The three trends are these:
In brief, Wilson argues that bureaucratic (and inefficient) hierarchies everywhere — in business, in government, in all institutions — are being displaced by networks, and those networks are inherently based on internet communications technologies. His examples include Twitter disrupting the newspaper business, YouTube pushing aside the hollywood studio model, and Soundcloud (and now Beyoncé) bypassing the record labels.
This is reflected in the world of business, the internals and externals of business. The third way of work is predicated on exactly the same disruptive force: social networks that are fully reliant on internet communications — not just the ‘collaborative’ tools of the late 20th century and the first few years of the 21st — are corrosively unmaking the bureaucracies of business. And just as Fred is investing in the disruptors in media and entertainment, we can expect that upstarts like Dropbox, Box, Editorially, and Asana — to name only a few top-of-mind examples — will accelerate that trend, and displace the creaking, aging tools predicated on a very different form factor of work and shape of organization.
[Note that it’s important to make the distinction between the disruptive technologies being developed today that are based on the central role of social networks, and not the earlier collaboration technologies that often have no networks at all, but only hierarchies, based on groups, and fairly authoritarian models of work.]
Fred talked about the formerly high costs of bringing products and services to market, and how that led to bundling. For example, opening a bank branch was expensive, so it would be sensible for it to offer a wide spectrum of services in the same place: savings accounts, CDs, auto and home loans, and so on. But today, the internet explodes that, and we will see (are seeing) the unbundling of that, with examples like Lending Club (peer-to-peer lending) and C2FO (a global collaborative exchange for working capital).
In business technologies, we are seeing the shift from broad technology platforms and tools — like SAP, IBM, and Oracle suites — to narrow and deep tools, well suited for specific kinds of workers, like Github for developers, and Adobe Social for marketers. And in particular, the emergence of small-and simple tools — especially those that play well on companion devices (smartphones, tablets, and wearables) — is the next wave.
And that brings me to Wilson’s third point: smartphones, or more generally, companion devices. He polled the audience in Paris, asking if they had to choose between their laptop and smartphone — where they could only have one — what would they pick? Approximately 80% picked the phone.
And why? The sensors, the location-aware apps, and because we are always within three paces of it: it’s with us all the time. We are connected — for the first time — all the time. We are nodes in the global social network of connected people, all of the time, and that — as Wilson makes clear — is important. Or to my way of thinking, revolutionary.
Benedict Evans wrote an important post this week, too, in which he makes one observation about the meaning of mobile scale, one that paints a bright red line across the timeline of human civilization:
These inflection points are critical, because it means that we can make inferences about the entire civilization a few years from now based on the behaviors of those most involved in the use of the new technology, today. And the interactions between the two sorts of devices, because PCs, smartphones, tablets, and soon, wearables all interact.
As Evans points out, that graph shows an enormously expanded internet, one that has almost doubled in size since 2010. Yes, doubling in three years. And the chart suggests it could double again in the three years following.
And he points out that smartphones aren’t connected to the web — the browser– to any extent like the way PCs have been. We’ve seen an explosion of nation apps using the internet as their backbone, but operating outside the browser.
That alone may explain the interest in small startup enterprise apps that really get the mobile behaviors — like Orchestra’s purchase by Dropbox, or this week’s acquisition of Collaborate.com by Cisco (see Cisco acquires Collaborate.com, but not a peep about Webex Social).
2014 is really looking like the year of these trends all crash together, a perfect storm: an always connected population and workforce, new apps that fill the corners of our totally connected lives and work, and the dissolution of institutional hierarchy by the corrosive and subversive nature of networks.