1. Nielsen Revises Gauge Metrics
Nielsen’s new The Gauge metrics for February 2023 are out and there are a host of surprises.
First off, there’s been a change to the methodology: viewing on vMVPDs is no longer included in the streaming category and thus numbers from YouTube TV and Hulu Live TV are no longer included in the streaming numbers for their respective hosts.
So surprise #1 was that this did not affect YouTube or Hulu’s pole position.
Surprise #2 is that the most viewed streaming show is not “The Last Of Us,” but rather “New Amsterdam,” an NBC medical drama whose current (and, it turns out, final) season runs on Peacock, with older seasons on Netflix.
Surprise #3 is that Tubi is now the second FAST in the Top 10, joining its erstwhile rival Pluto TV.
So let’s unpack what all this means, because there’s a lot to take away.
Why it matters
I’d never understood why Nielsen included the vMVPD numbers in YouTube and Hulu’s ratings, especially, as I’d pointed out to anyone who’d listen because most of what was being watched on those services was CBS and CNN, not YouTube or Hulu.
To their credit, Nielsen agreed and removed those numbers this month.
Brian Fuhrer who puts out The Gauge numbers is eminently reasonable, so that part didn’t surprise me.
What did is that the switch did not knock YouTube out of the #1 position.
Yes, YouTube’s overall share of viewing percentage dropped from 8.6% in January to 7.9% in February once the YouTube TV numbers came off. But that still kept it slightly ahead of Netflix, which accounted for a 7.3% share this time out.
Hulu, even more surprisingly, only dropped two-tenths of a percent without Hulu Live TV, going from 3.5% with HLTV in January to 3.3% sans HLTV in February, keeping it in third place behind YouTube and Netflix.
And since I was that kid who used to score Mets games off the radio back in the day here’s how the top services fared this time out versus last month, though I should note that none of the rises/drops was all that significant
UP: Tubi (not rated in February), YouTube (+0.6%), Hulu (+0.1%), Amazon (+0.1%), Disney+ (+0.1%)
NO CHANGE: Peacock, HBO MAX
DOWN: Netflix(-0.2%), Pluto TV (-0.1%)
Turning now to the most popular series, the success of “New Amsterdam” will surely come as a blow to New York Magazine which has, I kid you not, eight different articles about the season finale of the much buzzier “The Last Of Us” currently up on its website.
“New Amsterdam”, for those of you who are not familiar with it (raises hand) is a medical procedural in a similar(ish) vein to the long-running “Grey’s Anatomy.”
All five seasons are available on Peacock, while seasons one through four are available on Netflix and may well be driving the upsurge in viewing .
This, if you recall, is not a new phenomenon. Back in the day, AMC got a massive boost for “The Walking Dead” and “Breaking Bad” when older seasons of those shows appeared on Netflix and viewers binged and then tuned in to AMC for the current episodes. A similar dynamic seems to be playing out with Peacock.
But back to “New Amsterdam.”
This show, like CBS’s “Fire Country” (a hit on OG linear) is the sort of show the New York Magazines of the world have on “ignore” but which millions of people, few of whom self-identify as part of the Coastal Meritocrat class, eagerly tune into each week.
Or maybe not so eagerly.
It seems that “New Amsterdam” was canceled about a year ago (March 2022) and the series finale aired on January 17th 2023.
But what’s curious is that the showrunners have been out there as recently as January 2023, pushing the narrative that they have no idea why the series was canceled and that they “still had more stories to tell.:
So you can rest assured that news of these The Last Of Us-beating numbers is only going to add fuel to the fire.
Finally, there’s Tubi.
Fox’s FAST service now accounts for a 1% share of viewing which given that HBO Max is at 1.3%, is not nothing.
But what’s interesting about Tubi is that it defies the whole false “FAST is linear” narrative.
Yes, Tubi does have many linear channels.
But their apps and content offerings are designed around on demand. When you open the app, you see the on-demand offerings first—you have to click to get to the linear channels.
It’s something you might have heard here once or twice—that FASTs have both linear and on-demand, and that consumers actually like both and like having both options.
Pluto TV, which is also in The Gauge Top 10, takes a different tack and focuses more on its linear offering.
That said, it still has a robust on demand line-up.
Because FAST services have both.
And, if you’ve read either of our reports on the FASTs, you will know that the big SVOD service will soon have both too—some, like Paramount+, Peacock and Discovery+ already do.
So enough with the “FAST Channels” already.
What you need to do about it
If you’re Nielsen, kudos for admitting to your mistake, fixing it, and being open about it. That’s always the best course and the reality is that I’m probably one of a handful of people who noticed.
If you’re one of the big SVOD services, keep an eye on YouTube.
Granted, much of what is on there is not your direct competition for “watching TV” but they are your competition for “media I consume in my leisure time” and so they are still a massive threat.
Plus they have all that data. And all those dollars.
If you are in the programming department at NBCU, glad I am not you. There’s going to be a whole lot of explaining to do about “New Amsterdam”.
Granted, the show was not doing all that well in the ratings when you canceled it last year. But never underestimate the power of Netflix to revive a series.
If you’re Netflix, that’s a great sales and marketing tool and a reason to promote your library content and the ads you could sell against said library content.
If you’re the industry overall, it’s a lesson in how older series often have new lives. (Remember a few years back when every 8th grade girl in America seemed to simultaneously discover “Grey’s Anatomy” on Netflix?)
And so perhaps being the White Knight who swoops in and revives “New Amsterdam” is a smart move, especially if the rights issues can be worked out. If nothing else you’ll get a whole lot of favorable PR.
Finally, if you’re Tubi, well done. You had a vision and you stuck to it and now you’ve got a massive audience.
If you’re one of the other FAST services, remember that on demand still has a place.
And if you’re one of those people who thinks that the FAST ecosystem is composed solely of “FAST channels” (and that most of those channels are “stood up” rather than curated) please just stop.
Thank you.
2. Bally Goes Bankrupt
In a move that was in no way unexpected, Diamond Sports, the Sinclair subsidiary that owns rights for the Bally Sports RSNs filed for bankruptcy this week.
What happens next is still up in the air, but it appears that the courts will allow for some sort of restructuring and life will go on as normal.
There has been some noise about Major League Baseball stepping in to stream games if Diamond totally goes under (and more noise still about MLB wanting to actually launch a service of its own regardless) but right now that seems to be more rumor than reality.
What is real though, is that the RSN business is in a bad way and there doesn’t seem to be a clear path forward.
The question, for which there is no easy answer, is how many people are there who would gladly pay $30-$40/month for an RSN streaming service and are there enough of them to allow such a service to turn a profit?
I have some thoughts.
Why it matters
Let’s start with how we got here.
In the days before cable, baseball games were carried free, over the air, often by non-affiliated local stations.
In New York, Mets games were on WOR (channel 9) and Yankees games on WPIX (channel 11).
With the advent of cable, getting the rights to local baseball teams was a big deal in that it gave people a reason to sign up for cable.
Many of those non-affiliated stations were UHF and tough to tune into and cable offered the promise of clear high quality (for 1980) pictures.
So all the cable companies were tripping over themselves to sign up the nascent RSNs as it was a great way to acquire new subscribers, not to mention an amazing sales tool.
The RSNs, realizing they had the upper hand in the negotiation, put all sorts of demands on the cable companies, the primary one being that the RSN had to be included in all of their bundles, even the most basic ones. (This was put forth as a “caring about our fans” thing, rather than a “we’ve got you over a barrel” thing.)
Having the RSNs at every tier pushed up the price of the bundle, but the cable companies were happy to comply as the number of consumers who wanted to be able to watch baseball was greater than the number who balked at paying a high monthly cable bill.
Fast forward around 35-40 years and the carriage fees paid to the RSNs, which now also carry NBA and NHL games, is a drag on the MVPDs and a key reason why consumers’ monthly bills are often well over $100. (Those carriage fee costs get passed on to the consumer. It’s not as if the MVPDs are going to pay all those billions themselves.)
RSN viewership is falling too, partly because of cord cutting, mostly because a younger generation can get scores in real time from a variety of online sources and just does not have time to watch 162 MLB games each year.
Which is why the two biggest vMVPDs, Hulu Live TV and YouTube TV, don’t carry a whole lot of RSNs.
And why WBD is looking to get out of the RSN business.
So streaming seems to be the answer, only that question remains: how many fans are there who’d be willing to pay $30 or even $40 each month for a streaming RSN, and will the number be enough for the business to be profitable?
The answer appears to be “it depends.”
As in, it depends on which market you are talking about: big markets like New York and Los Angeles likely do have enough fans. Smaller markets like Memphis and Oklahoma City which only have a single major league team to begin with, may not.
What does seem certain though is that the vast sums of money teams used to receive for their rights are a thing of the past—Sinclair paid $19 billion for rights to the Ballys RSNs and we’re unlikely to ever see a number like that again.
Or as several people have said to me lately, the NFL got the last great sports rights deal.
What you need to do about it
If you are Diamond Sports, you need to keep doing what you are currently doing, which is to negotiate your new cable deals (you are what is keeping many of their pay TV subscribers in place) while figuring out a way to pay the Diamondbacks and have your lawyers iron out the bankruptcy details.
You’ve also got to figure out what the right price point is for those Ballys streaming apps and which markets it makes sense to be in and if it makes sense to have the larger markets partially subsidize the smaller ones.
If you are one of the leagues you need to decide how involved you want to get, whether it makes sense to take back rights and start your own streaming service, double down on Bally’s and other players or just sit back and see how it all plays out.
But if your goal is to reach younger fans—and by “younger” I mean “55 and under”—then streaming is the only way to go.
If you’re a fan, sit tight. This will all eventually work itself out, stressful thought that may be in the interim.
And while you’re sitting tight, think about what sort bells and whistles an app would need to have to get you to pay $40/month for it.
I’m thinking there are likely to be a lot of them and that heavily discounted tickets would play a key role in that package.
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.