Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.
1. AT&T rumored to be looking to unload Xandr, DirecTV
Remember how Verizon, under hapless ex-CEO Lowell McAdam made a series of amazingly boneheaded decisions, from buying ’90s internet giants Yahoo and AOL and merging them into something called Oath, launching the dead-in-the-water Go90 mobile service to buying Intel’s OnCue TV service?
Well we all might, but clearly no one at AT&T does.
Not to be that guy who says “I told you so” but all through former AT&T CEO Randall Stephenson’s mad buying spree, our key takeaway was that they were building a business that looked good on paper and might appeal to other businesses, but (and this is key) they never once stopped to wonder if consumers would actually want it.
And now those chickens are coming home to roost.
Why it matters
In simplest terms, the plan seemed to be: “We’ll launch a bunch of pay TV services and a supersized version of HBO. We’ll give away ad-supported HBO (which everyone will clearly want, despite 30 years of ad-free HBO) to anyone who subscribes to our pay TV services and our mobile phone service. Then we’ll take all that data from our many TV and mobile services and funnel it through Xandr as a great way to target consumers across multiple platforms. Brands will love it!”
Only things did not go as planned, because they never factored consumer into the equation and whether they would love it.
They did not.
AT&T has lost around 1 million pay TV subscribers in each of the last three quarters. It’s not hard to figure out why either. They have five different services, maybe more—it’s hard to keep track. There’s DirecTV, DirecTV Now which is now called AT&T TV Now, AT&T TV, which is not DirecTV, but rather an IP-based service, U-verse, and something called WatchTV.
All of their many services did have one thing in common—at a time when everyone else was selling on service in the form of simplicity and interface design, AT&T was selling on price and when those introductory offers went away, so did their subscribers.
Which is why it’s no surprise that AT&T is looking to offload DirecTV and various private equity groups are being bandied about as the most likely buyers, especially if AT&T won’t sell to Dish, which is at least trying to be innovative with its satellite and Sling TV services.
Xandr too seems to be on the verge of imploding, hence the recent rumors of a “for sale” sign there too and the concurrent reaction from the industry which has been “what could they actually sell and who in their right mind would buy it?”
Brian Lesser, Xandr’s original CEO is long gone and they’ve never been able to get their video inventory game going because all the people who have video inventory see AT&T as a competitor and don’t want the fox in the proverbial henhouse.
Plus there’s the part where Verizon said they were not going to be using their mobile data to target customers for their TV advertising, which, at a time of such heightened focus on privacy, makes AT&T’s decision to use mobile data to target TV viewers seem kind of sleazy.
So there’s that, and there’s the fact that HBO Max is off to a sluggish start and still hasn’t really convinced many people who did not already have HBO that they need to come on board, especially now that “HBO style” programming is available through all the seven of the other Flixes.
So, there’s that too.
To their credit, AT&T did not make one of Verizon’s big mistakes, which was to hire people with no TV experience to run TV-centric projects. But while they’ve seemingly made the right hires, the die was already cast and there was little those folks could do to make it work.
What you need to do about it
If you’re T-Mobile, learn from AT&T and Verizon’s mistakes. The mobile phone business is very different from the TV business and just because you’re really good at one, doesn’t mean you’ll be any good at the other.
If you’re hiring, there are a lot of good and smart and talented people who took jobs at Xandr and DirecTV because they thought they could create something special. Don’t hold that against them.
If you’re AT&T, remember there’s a light at the end of the tunnel—Verizon has a new CEO, a new focus on technology and they are most definitely bouncing back.
2. Nielsen Says Netflix’s Library Content Is Where It’s At
Nielsen released its streaming numbers this week, looking at which series viewers streamed for the most total hours.
Netflix unsurprisingly got all of the top ten spots, because they have far more subscribers than everyone else.
What was surprising though was that only one of the top 10 series on Netflix was an original (“Umbrella Academy”)--the rest were all network reruns.
Why it matters
While it may seem easy to read a lot into this, don’t.
Nielsen’s formula was to look at the total number of minutes watched for each series.
So, series like “The Office” or “NCIS” or “Supernatural” with hundreds of episodes are going to log many more hours than originals with just eight episodes.
And while many of us were surprised at the popularity of Showtime’s “Shameless” and “Dexter” (number two and number eight on the list), the rest of the list was just what you’d expect.
What is interesting though is that there is clearly a desire for the sort of lean-back, I’ve-seen-this-already-but-happy-to-watch-it-again programming that is the domain of the FASTs.
It’s why they’ve become so popular too—people don’t always want to watch an intense original drama or comedy that requires rapt attention while it’s on the air and hours of pondering when it’s over. Many times, maybe even most of the time, they just want to be entertained, to watch Jim and Pam flirting on “The Office”, secure in the knowledge that by the last few seasons it all works out.
In other words, they want to be amused, not challenged.
Which is why so many people are so hot on the FASTs.
What you need to do about it
If you’re a Flix, remember that while originals may attract viewers to your service, the right type of library content is what’s going to keep them there.
If you’re a FAST, your goal is to let viewers know you have the kind of programming they’re looking for when the notion of starting an intense ten-hour Netflix drama seems more than a little overwhelming. A very deep library will help, especially if you assemble it via a smart content acquisition strategy.
If you’re a journalist, remember those Nielsen numbers are skewed--they look at total hours viewed, and given that Netflix has many more viewers than any other service, their shows are going to be watched for many more hours.
If you’re Nielsen, I know I’d love a stat that showed the number of hours watched in relation to the number of overall subscribers. Something that showed how popular each series was in relation to other shows on the same platform. Thanks.