1. FASTs Really Are The New Cable
So I was thinking I’d need to find a clever way to sneak in reference to our brand new TVREV Special Report, FASTs Are The New Cable when Verizon and Fox dropped a gift in my lap: as part of a new carriage deal, Fox’s FAST, Tubi, is going to be available via Verizon FIOS’s program guide. Proving, it would seem, that FASTs really are the new cable, as it is likely that in an attempt to bolster their shrinking subscriber bases, multiple MVPDs will be picking up multiple FASTs.
This makes perfect sense in that FASTs offer a far better experience than the current cable TV line-up, what with better interfaces, superior curation, and, best of all, far fewer commercials.
Why it matters
Q2 cord cutting numbers have not been kind to the MVPDs. As we’ve been noting for quite some time, cord cutting will be a slow-but-steady drip, not the “massive wave” that the tech press, like Linus awaiting the Great Pumpkin, keeps hoping will appear.
That said, gradually losing more and more customers every quarter is not a business plan and so the MVPDs have to do something.
The good news (for the MVPDs, anyway) is that they really don’t need a pay TV bundle, at least not in its current incarnation.
While providing access to hundreds of pay TV channels was once the MVPD’s raison d’être, they now make the bulk of their income selling broadband. Meaning that bundling in a pay TV package is just a way to create stickiness and that the contents of said pay TV package don’t need to be bundles of hundreds of undistinguishable cable channels.
Hence, the likely inclusion of FASTs, whose linear channels provide a very cable-like experience, only with better curation and fewer commercials.
That latter bit is very important, because, as we’ve also noted here before, pay TV’s seemingly endless stretches of minute-long pharma commercials, with their odes to diarrhea, nausea and death have likely done more to help kill off traditional pay TV than just about anything else.
Verizon is smart to include Tubi in their deal with Fox, though they are taking a risk that viewers will figure out they don’t need to pay an extra $100/month just to get access to the free Tubi service.
So there’s that too, though I suspect that a sizable percentage of pay TV subscribers are technophobic enough that the thought of logging into Tubi through their smart TV’s interface rather than a cable box would fill them with endless agita.
What you need to do about it
If you are an MVPD, you should take Verizon’s lead and start including various FASTs on your program guide for all the reasons listed above.
But don’t stop there.
You should also strike deals with the various SVOD services and look to create bundles of streaming services and FASTs that you can offer your subscribers as part of a bundle that includes broadband along with (possibly) a very slimmed down group of broadcast and cable networks.
While the SVOD services may not be all that into it this week, as churn heats up and subscriber numbers level off, they will see the light and see the wisdom of a deal that lets them lock subscribers in for a year or even two.
If you’re a FAST, there does not seem to be any reason not to strike one of these deals. You get more viewers, more ad revenue and more exposure.
A win any way you look at it.
2. The Great Rebundling Continues Apace
Building on this week’s theme comes news that Paramount+ will now be available on Roku via The Roku Channel.
Viewers will be able subscribe to both the ad-free and ad-supported version of the service, whose offerings will be integrated into their Roku Channel lineup.
This follows on the heels of a similar deal between Roku and Discovery that allows The Roku Channel to also offer Discovery+ on the app.
Why it matters
The Great Rebundling is going to happen in a number of locations. While the MVPDs, who can also throw in broadband, are an obvious option, we will also likely see similar rebundling happen on SVOD aggregators like Amazon and The Roku Channel. Meaning that it would not surprise anyone if the smart TV OEMs followed suit and allowed viewers to subscribe to SVOD services and/or bundles of SVOD services via their existing FAST apps.
There are four key reasons for this.
- Viewers crave simplicity. While the initial promise of streaming with its unlimited options and choices was exciting, viewers eventually become overwhelmed, exhausted or both. Think Spotify—picking whatever song you wanted whenever you wanted was great…until it wasn’t. Which is why their curated playlists became so popular. Hence linear channels on the FASTs and the desire, as per a recent Hub Entertainment Research study, of over 90% of viewers to have their subscriptions aggregated.
- Advertisers like stability. They like knowing that a service will still have the same number of subscribers six months down the road when their ads actually run.
- Production companies like stability. If you are Quentin Tarantino and you’re looking to place your first ever TV series, you want to be sure that the audience on whatever streaming service you choose will not suddenly shrink due to subscriber churn.
- Wall Street likes stability. They may not completely understand the whole streaming ecosystem (a serious understatement if ever there was one) but they know that fluctuating subscriber numbers are a bad thing.
And if you’re sensing a theme here, there’s a reason for that: in any period of massive change and fluctuation, anyone who is able to offer stability, even if it’s just the illusion of stability, is going to come out ahead.
What you need to do about it
If you are an SVOD service, the more places people can subscribe, the better. With eight multi-billion dollar services all competing for the same subscriber base, worrying about having control over all your data is a luxury you can’t afford.
If you’re an OEM of any sort and you have a FAST service, becoming an aggregator is a smart move. Consumers want simplicity and if you can offer that to them in the form of an easy way to aggregate all their subscriptions, all the better. Driving viewers through your FAST’s interface every time they turn on the TV, regardless of what they are watching, is going to net you more revenue than forcing them to go directly to an app for their SVOD fix.
If you’re a consumer, fist-bump. This trend is only going to make your life easier. Not to mention your finances.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Wolk's Week in Review is an opinion column. It does not necessarily represent the opinions of Fierce Video.