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We've already seen the Disney+ price have a moderating effect on the HBO Max price. I think Netflix with its recent price increase is unsustainable as it loses more and more content, replacing it with mostly unproven originals, throwing spaghetti on the wall every month with so many new series while cancelling popular favorites when actors and crew start asking for more money. I never thought I'd cancel Netflix, but I have lived happily without it since May, getting more value out my Prime Video benefit and my $7/mo Showtime subscription via YouTube TV. I will probably only sub to Netflix one or two months out of the year moving forward to catch up on a few must-watch shows.

Zookster said:

We've already seen the Disney+ price have a moderating effect on the HBO Max price.

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So there is pricing pressure on the OTT services that they perhaps didn't anticipate and there's a different pressure with respect to being able to obtain popular content (at least in first-run status). That doesn't bode all that well for the services that don't have a lot of their own content and it wouldn't seem to be a good omen for services trying to cover many of the bases (YTTV, PS Vue, Sling et al). The networks taking their content direct is beginning and I don't see anything that is likely to stop it (unless the networks have wildly underestimated the cost of dealing with customers -- a very real possibility).

I share a similar level of interest in Netflix and may re-subscribe when a few of the shows they got from network TV become available. I'm liking the idea of Lucifer and Designated Survivor keeping going. Longmire is what got me interested in Netflix in the first place and I kept it until the previous season of The Ranch ended. That said, $12.99/month may a lot to watch 18-24 episodes of serial TV.

EDIT: I was wrong about the Netflix price being $14.99

harshness said:

So there is pricing pressure on the OTT services that they perhaps didn't anticipate and there's a different pressure with respect to being able to obtain popular content (at least in first-run status). That doesn't bode all that well for the services that don't have a lot of their own content and it wouldn't seem to be a good omen for services trying to cover many of the bases (YTTV, PS Vue, Sling et al). The networks taking their content direct is beginning and I don't see anything that is likely to stop it (unless the networks have wildly underestimated the cost of dealing with customers -- a very real possibility).

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No, it won't stop. We're in a long-term transition away from using MVPDs as middle-men distributors who package up content (i.e. channels) from lots of different owners into a single bundle, and toward a system where consumers buy individual bundles directly from each content owner. In a way, we're getting what lots of folks always said they wanted: a la carte. Except those folks were always taking about the ability to pick and choose individual linear channels. But, of course, linear channels really serve no purpose once content has shifted to the internet. And the content owners see no value in selling consumer tiny little slices of their overall content portfolio. So instead, we see them either sell you their entire package (e.g. Netflix, HBO Max, Peacock, Prime Video, Apple TV+) or break it up into 2 or 3 smaller packages which can be combined at a discount (e.g. Hulu/Disney+/ESPN+; Showtime/CBS All Access).

As you say, the future looks dim for pay video distributors who don't own any content. They're getting disintermediated. The future belongs to content owners who can go direct-to-consumer. And then they also have the option of offering packages of add-on linear channels from their competing content owners (as long as the linear cable channel system still exists). This is what Hulu does with their live TV add-on and AT&T/Warner has said they'll do the same with HBO Max. Hard to imagine that Comcast/NBCU won't do this with Peacock too, given that Comcast has just a bit of experience in packaging and selling cable channel bundles. Remains to be seen whether ViacomCBS will do it with CBS All Access. (I don't know why they wouldn't. But first, if I were them, I'd build out the core service by adding in a bunch of that newly acquired Viacom content, plus all their free Pluto TV channels. Allow Showtime to be added and accessed inside the same app too. And then it would make total sense to sell an optional add-on bundle of live cable channels that could integrate with their free Pluto channels, all right in the same All Access app.)

This is why I don't see any long-term future for cable TV distributors that don't own content, like Charter, Verizon, Cox and Altice, much less the vMVPDs like Sling, PS Vue, and Fubo TV. The only non-content-owning vMVPD that can survive is Google's YouTube TV. (Well, OK, Google owns a lot of user-uploaded stuff via YouTube, but they don't own a lot of Hollywood-quality TV and movies.) And that's because Google already has a huge lead in digital advertising, plus a robust streaming video platform. And they have a ton of money, so they can price YouTube TV at a slight loss for now while they scale it up to a point where the economics eventually work, thanks to increased ad revenue and lower channel carriage rates per subscriber. Their new distribution deal with Verizon, in which they sell YouTube TV to their own home broadband and mobile customers, should help boost their subs. I expect to see a lot more such deals in the future as network operators decide to ease out of the business of running their own cable TV services and instead just re-sell one or more of the big OTT services and take a little kickback.

NashGuy said:

And that's because Google already has a huge lead in digital advertising, plus a robust streaming video platform.

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Several have a platform but if they can't get all of the key content when people want to watch it, what good does having a robust transport mechanism do?

harshness said:

Several have a platform but if they can't get all of the key content when people want to watch it, what good does having a robust transport mechanism do?

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Well, YouTube TV (like all other cable channel services) can succeed only as long as the current channel-based content distribution system continues to exist, and that probably won't be forever. More and more of the content folks want to watch will become exclusive to these direct-to-consumer on-demand services. But Google has their own DTC on-demand service in the form of regular YouTube, which is, to a large extent, the future of free ad-supported TV. So they're fine in that regard. And Google has indicated that the premium original content that they make and previously sold ad-free via subscription ("YouTube Red") is shifting over to regular free YouTube, with ads.

Think of YouTube TV as being an optional add-on to regular YouTube, much like the live cable channel package add-ons to Hulu, HBO Max, etc. Except YouTube TV uses a completely different app. I wonder if Google at some point doesn't integrate regular YouTube content into that app's UI too (or vice versa).

NashGuy said:

So they're fine in that regard.

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I'm less interested in the viability of the parent company than I am about the viability of OTT MPVDs in general.

I fully expect some serious backlash when people tire of doing business with multiplicity of different providers.

harshness said:

I'm less interested in the viability of the parent company than I am about the viability of OTT MPVDs in general.

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OTT MVPDs are viable to the extent that, over the long term, they can be offered as part of an overall profitable business plan. If the MVPD is operated by a major content owner that has its own DTC SVOD, like AT&T with HBO Max, or Disney with Hulu, or Comcast with Peacock, or Google with YouTube, then the MVPD can effectively serve as an extension to the core DTC business, which is where they make their real money. They can accept low margins on the MVPD add-on. "You want to pay extra to get other companies' channels? OK, we'll sell them to you and let you watch them inside our app. Why not? It makes our app stickier and we get to capture that viewing data, which helps us better figure out what sort of programming to offer on our own core DTC service." In that way, the operator can accept margins on the MVPD part of the service that would be unacceptably low for standalone MVPDs that don't have their own DTC service featuring content that they own.

harshness said:

I'm less interested in the viability of the parent company than I am about the viability of OTT MPVDs in general.

I fully expect some serious backlash when people tire of doing business with multiplicity of different providers.

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But will they go back to Cable/Satellite or do something else? That is, what will the backlash look like?

NashGuy said:

If the MVPD is operated by a major content owner that has its own DTC SVOD, like AT&T with HBO Max, or Disney with Hulu, or Comcast with Peacock, or Google with YouTube, then the MVPD can effectively serve as an extension to the core DTC business, which is where they make their real money.

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Why would someone compete against themselves (obviously other than AT&T)?

Would Disney allow their content to be carried by NBC and vice versa? Would CBS share with either of them?

I'm doubtful.

I'm also of a mind that those who deliver the programming should be fully independent of those who create it.

harshness said:

Why would someone compete against themselves (obviously other than AT&T)?

Would Disney allow their content to be carried by NBC and vice versa? Would CBS share with either of them?

I'm doubtful.

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There's a very basic aspect of what I'm talking about that isn't getting through here. MVPD = linear cable channel service. And, yes, Disney allows Comcast/NBCU to carry their various channels (ABC, ESPN, Disney, Freeform, etc.) on the Xfinity TV MVPD. Why wouldn't they allow NBCU's upcoming Peacock SVOD to operate an MVPD extension, i.e. an add-on package of live cable channels, that includes ABC, ESPN, etc? Likewise, Comcast/NBCU have their various channels (NBC, USA, MSNBC, NBCSN, SyFy, etc.) as part of the MVPD extension of Disney's Hulu.

The whole way that MVPDs have always operated is for the content/channel owners to allow other companies (the MVPDs) to package their channels together with other company's channels into a bundle that they sell to the end consumer. As MVPDs have moved online as "virtual MVPDs" that basic structure continues.

The new thing that is emerging, separate from (and ultimately replacing) MVPDs, is direct-to-consumer (DTC) services that mainly contain the operator's own content, e.g. Disney+, HBO Max, etc. Those services will include most/all of the content from the operator's linear channels, e.g. TBS, TNT, Cartoon Network, etc., but they'll also include exclusive new original content that's not available outside of that specific DTC service. So no, you're not going to see NBCU allowing Hulu access to Peacock originals. You're not going to see CBS allowing Peacock access to CBS All Access originals. You're not going to see HBO Max allowing Disney+ to access their new Max Originals. But their linear broadcast/cable channels? Sure. Those will continue to be distributed online by third parties, according to whatever carriage rates and stipulations both sides settle on.

NashGuy said:

There's a very basic aspect of what I'm talking about that isn't getting through here.

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That may have something to do with the fact that you start with saying yes and you finish your post with saying no. On the one hand, you say that MVPD will live on and on the other you say that it will not be enough.

Of course some of this depends on the networks knowing what their customers want (except for Disney that believes they have a midas touch) and that will be enough to drive them to their DTC offering (CBS, are you listening?).

harshness said:

That may have something to do with the fact that you start with saying yes and you finish your post with saying no. On the one hand, you say that MVPD will live on and on the other you say that it will not be enough.

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Bottom line: the future of video belongs to content owners. MVPDs that do not own content will exit the business in the first half of the 2020s. We are transitioning from the MVPD system to the DTC system. There will be a long interim phase in which DTCs optionally offer an MVPD add-on to their DTC, but eventually linear cable channels and those MVPD add-ons will wither away, as all content (including sports) will become locked up within one DTC or another.

No idea what you're talking about with "saying yes" and "saying no". But I've read enough of your posts over the years here, and interacted with you enough to know that it's probably not worth my time to elaborate any further. Feel free to go back and carefully re-read my posts in this thread if you like.