Wolk’s Week In Review: Pluto revolutionizes the OTT interface, YouTube TV makes a deal for Sinclair’s RSNs

TV[R]EV Week In Review

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.

Wolk's Week In Review

1. Pluto revolutionizes the OTT interface

Pluto, the FAST now owned by ViacomCBS in what is increasingly being seen as a supremely prescient move, just rolled out a new version of its interface that features something surprisingly revolutionary for an OTT app: the ability to change channels with just one click.

Why it matters

As my partner Jason Damata had pointed out a while back, one reason OTT ads have such a high completion rate is that there’s no easy way to skip past them—you can’t just click to the next channel and then come back two minutes later. (Or five minutes later if we’re being honest about current TV ad loads.)

While that may be a boon for advertisers, it’s not really great for viewers. Especially viewers who are watching lean-back TV.

[Quick Sidebar: You can pretty much divide TV circa 2020 into two distinct experiences: “Lean-in TV” where you are watching a high profile show like “The Handmaid’s Tale” or “Watchers” and that’s all you’re doing—no phone grazing, no chatting, no interruptions. “Lean-back TV” is where you’re doing something else—making dinner, checking email, waiting for Seamless to arrive—and the TV is just on as background noise.]

So, it’s that latter experience where the inability to just flick from channel to channel becomes a negative.

Then there’s serendipity, something the internet has struggled with since its inception.

Serendipity is the enemy of recommendation engines because it often means stumbling on to something you wouldn’t have thought you’d have liked. Which happens when you can wander around a Barnes & Noble. Change stations on a car radio. Or flick from channel to channel on your TV set.

By letting users easily click from one channel to the next, Pluto, whose main interface now consists of a series of genre-oriented channels, is not so much recreating the old school TV experience as it is bringing back serendipity. 

And in an age where we are already overwhelmed by the amount of available choices and about to be overwhelmed by even more, the idea that we can still find things randomly (rather than via a recommendation engine) is pretty radical.

Especially if you’ve ever read or listened to Yuval Noah Harari and his whole theory on how AI will mean machines soon know us better than we know ourselves. 

It’s like the woman from the Apple 1984 commercial throwing the hammer onto the screen of Harari’s AI engines.

Long live serendipity.

What you need to do about it

If you’re part of the Pluto team, take a bow—the click-to-the-next-channel feature is just one part of a very well done redesign.

If you’re Bob Bakish and team, take a bow as well, because buying Pluto when you did is looking wiser with each passing month.

If you’re another FAST or Flix, get to work on your own version of serendipity because we have a feeling it’s going to prove very popular with consumers.

If you’re an advertiser, this means viewers will be able to pick up the remote and skip past your ads again. The solution to which, of course, is to make better ads and ensure they’re correctly targeted. The latter, of course, being one of the key advantages of OTT.

2. YouTubeTV makes a deal for Sinclair’s RSNs

Shortly after Sinclair bought up most of Fox Sports’ regional sports networks (RSNs) for close to $10 billion (not a typo) they hit a bump when YouTubeTV, one of the larger vMVPDs, pushed back against renewing those deals.  Fortunately for Sinclair and for YouTubeTV subscribing sports fans, a deal (of sorts) was reached earlier this week.

Why it matters

RSNs are one of the more controversial topics in the TV universe.

Some people see them as the last bastion of hope for traditional pay TV, the reason (along with 24-hour news) that people still subscribe to various MVPDs and vMVPDs.

Others see them as vestiges of an older era where fans had time to watch one hundred or more games every season and where the internet and ESPN didn’t exist to provide highlights and live updates along the way.

Our take is somewhere in between: RSNs appeal to people who are die-hard fans of a particular team, rather than a sport or all sports in general.

Meaning that if you’re a Boston Celtics fan, you want to watch Celtics games. Period. While a Lakers-Trailblazers game on ESPN might not be a bad diversion, you really don’t care much about it because it’s not your Celtics.

ESPN, OTOH, appeals to a more general fan, someone who just wants to watch a basketball game or a football game to kill some time on Sunday evening. The teams don’t much matter so long as it’s an exciting game.

So the question then becomes, will that die-hard Celtics fan be willing to pay the $26/month that our friend Colin Dixon suggests a stand-alone RSN would cost?  

The answer likely depends on whether the Celtics are wicked awesome that season, but we suspect there would be takers, especially if the subscription were also available on a monthly basis for fans who wanted in closer to playoff season.

But the question then becomes, is that enough to keep an RSN afloat?

That’s another story and it’s why the sports leagues themselves may wind up taking back control of the rights to their games. (Eventually, as in it will be quite a while before all the current contracts expire.)

Until then, MVPDs and vMVPDs will have to figure out how to position their RSNs—keeping them in the bundle is going to make that bundle much more expensive at a time when viewers are likely to be questioning why they’re subscribing to cable at all,  given that 95% of what they’re watching is FASTS and Flixes.

As we’ve noted before, SuperSkinny bundles of just the broadcast networks for around $10/month would seem to be the answer, with extra-cost bolt-ons for news and RSNs. 

But if the cost of an RSN subscription really is $26/month, that number is going to seem punitively high—especially compared to services like HBO Max and Netflix—and sports fans are really going to need to do some major justification before enough of them sign on to make it work.

What you need to do about it

If you’re a sports league, start (or more likely continue) to think about what next steps are in bringing everything back in-house.

If you’re an MVPD or vMVPD, time to examine just how many subs you’re gaining/keeping by offering that RSN and what would happen if you didn’t.

If you’re a Sinclair shareholder, $10B? Really?

If you’re a sports fan, think about how much you’d be willing to pay to see every game. On the one hand, $26 is a lot of money. On the other, it’s about a quarter of the price of a not-very-good seat at a single game.

Your call.