With streaming video companies looking for ways to stem the slowdown in subscriber growth, a panel of experts at the Next TV Summit said using an old cable tenet — bundling — could help attract more price-conscious consumers into the fold. 

At the “Recession Realities” panel at the gathering Tuesday, part of NYC TV Week, Weather Group senior VP and chief marketing officer Fred Bucher said the same economic forces and price sensitivity that killed the cable bundle are apparently making a comeback with streaming. Already streamers like Disney, with its Hulu, ESPN Plus and Disney Plus bundle, and others are repackaging services to make them more attractive to consumers. 

“Economic forces and price sensitivity is what killed the cable bundle, and that’s continuing,” Bucher said, adding that price sensitivity and churn are driving the creation of different tiers of pricing and services like ad-supported video-on-demand (AVOD) and free ad-supported streaming television (FAST) services.

Weather Group launched its own streaming service — Local Now — to address cord-cutters who missed local news and entertainment content.

“A lot of the answers for the future are in the past,” Bucher said, adding that what built the cable business — aggregation, better pricing and bundling — will likely be cornerstones of SVOD and AVOD models in a few years. 

Panel moderator Jon Geigengack, founder and principal of Hub Entertainment Research, said that as the bundle grows, consumers will crave a way to make finding content easier, and aggregation is one way to satisfy that need. 

DirecTV Advertising Group VP, client success, programmatic and ad operations Rose McGovern agreed, adding that aggregation is what DirecTV does best. Citing recent Nielsen research, she said about 64% of customers wish to have a bundle that includes as much or as little content as they want. 

That includes live and local programming as well, McGovern added, with about 67% of people nationally watching live content every day. 

As content streaming choices grow, Bucher said it is imperative that content companies get the word out, and that means marketing becomes more important than ever. 

“The biggest threat is underinvestment in marketing,” Bucher said. “It starts with great content, great product experience, and great marketing. If you don’t have those three things, you’re not going to win.” 

Bucher added that critical to the marketing effort is that streamers really know their consumers. 

“You have to understand who your consumers are, understand who your hard core users are too  and make them happy,” Bucher said.

And once you’ve hooked a viewer, the trick is keeping them. At AMC Networks, executive VP of performance marketing Sylvia George said engagement is a critical part of the equation. 

“What is so critical is your audience,” George said. “The relationship with the audience, super-serving the audience, making sure that you’re segmenting your audience based on data, based on what is your audience engaging with once they come in — not just the first thing they watch, what’s the second and third thing they watch. Getting people engaged within a specific time period is critical to ensuring retention. If you don’t get your subscriber engaged within a few weeks, you’re at risk of losing them. You can’t get complacent.”

The panel also was encouraged by Netflix’s plan to launch an ad-supported version of the service soon. The company has already partnered with Microsoft to provide the tech infrastructure for the AVOD service. 

“In some ways, they could help re-energize the advertising business,” Bucher said, adding that Netflix doesn’t have the “institutional inertia” of some other companies that have long been in the ad business. “It’s kind of cool to take a fresh look.”

Bucher was especially encouraged by the vast amount of data in Netflix's arsenal, adding that the ad business may never get this chance again. 

McGovern also was encouraged by the potential for more innovation that a Netflix AVOD product could bring. For example, a departure from the traditional 15-second to 30-second ad spot.

But Bucher warned that whatever comes out of the Netflix AVOD experiment will depend on outside pressures. 

“There’s a lot of stuff they could do that could be an enormous amount of fun… but what it’s going to come down to will be how much pressure they’re under to deliver a number of revenue,” Bucher said. “If there are huge revenue expectations, that’s going to diminish innovation, because they are going to default to what they know, and agencies will say, ‘Just make it easy for me.’ That, to me, will be a shame. 

“The irony is that Reed Hastings, who was so dogmatic for so long about advertising, can actually become the person to really reinvent the space,” Bucher continued. “I hope they’re given the time to do that. “ ■ 

Paramount, which already started bundle-pricing its two big SVOD services last year, is taking the strategy to the next level.

The conglomerate is now offering a bundled version of Paramount Plus that includes Showtime integrated into a single app. And through Oct. 2, Paramount is promotionally pricing the bundle at $7.99 a month for the partially ad-supported Essentials tier, and $12.99/month for the ad-free Premium Plan.

After Oct. 2, the bundles shoot up to $11.99 and $14.99, respectively.

“This singular user experience streamlines sign-up and enhances discovery, and this lower price will allow more households to enjoy this exceptional combined entertainment offering.” said Tom Ryan, president and CEO of Paramount Global Streaming.

Paramount touted 64 million direct-to-consumer customers at the end of the second quarter. Like Warner Bros. Discovery, Paramount no longer provides granularity on specifically how many subscribers belong to each of its two major subscription streaming platforms.

For its part, WBD said it's outright combining HBO Max and Discovery Plus into a single app. It has said nothing about the offering being a "bundle."

A question: Might Paramount's more flexible approach to combining its services be something WBD emulates? ■

With Verizon set to launch its Plus Play bundle of digital subscriptions later this year, Barclay’s Group media analyst Kannan Venkateshwar believes that depending on the structure, the growing trend of bundling streaming services to attract new subscribers could serve as a gateway to the industry’s true direction: an aggregation model similar to what Google did with search, Netflix did with TV networks and Spotify did with recorded music only a few years ago.

With streaming subscriber growth on the fritz over the past few quarters, investors and analysts are understandably paying close attention to how bundling could change the dynamic in the industry. While others have tried bundling services -- Disney has grouped its Disney Plus, Hulu and ESPN Plus streaming services in a $13.99 monthly package ($19.99 ad-free) with relatively strong success. what makes Verizon’s Plus Play different is its decision to pair video with sports news sites like The Athletic, fitness programming from Peloton, music, weight management via WW International and language services from Duolingo. Already other streamers like Discovery Plus, AMC Plus, Disney Plus, A+E Networks and others have signed up to Plus Play, with HBO Max agreeing in April to be available through the service.  

There are Bundles, and Then There’s Bundling

“Bundles are more than the sum of its components,” Venkateshwar wrote, adding that consumers see bundles as separate products with a value all their own.   

“In our opinion, the implications of this are not appreciated enough by media management teams because if they were, fragmentation of content in forms seen over the last few years would not have been enabled by media companies and distributors,” he wrote.

In that vein, the analyst said that more important will be how bundles are constructed, adding that the old way of simply offering fewer channels for a lower price won’t cut it anymore. In fact, he added that in many cases, smaller bundles could be worth more than their fatter counterparts. 

“In our opinion, the nature of bundles as independent products also implies that a 20-channel bundle is not necessarily half as valuable as a 40-channel bundle,” Venkateshwar wrote. “In fact, the smaller bundle could even be perceived as being of more value than the bigger bundle, based on factors such as content mix, nature of experience, and convenience (e.g. full stacking, offline viewership, etc.)”

And he continued that if streamers follow that recipe, it could be bad news for traditional distributors. 

“This is also why a bundled offering of streaming services could accelerate the pace of cord cutting in legacy pay TV bundles, especially if the streaming bundle is offered by an aggregator that eases content discovery,” he wrote.

While Verizon hasn’t yet mapped out what the Plus Play bundle will look like exactly, Venkateshwar predicted it would be a mixed price bundle, where the underlying services will be available individually but potentially more expensive on a retail basis, much like the Disney model for its Disney Plus-Hulu-ESPN Plus bundle. He expects HBO Max and Discovery Plus, which parent Warner Bros. Discovery has indicated will eventually be bundled together, to look the same at least initially. 

Advertising Changes Everything

But Venkateshwar said the dynamic changes again once advertising is added to the streaming mix, especially around the ad-time allocated to distributors. Every major streamer has said it will offer an ad-supported version if they haven’t already, with Disney Plus and Netflix targeting year-end for their respective launches. So-called Free Ad-Supported Television (FAST) services like Tubi and Pluto TV have managed to attract a large swath of consumers -- they have 51 million and 68 million active monthly users, respectively -- another catalyst for other providers to join the fray. 

According to Venkateshwar, while it is possible that streamers will offer distributors the standard 2 minutes of ad inventory each hour in addition to their affiliate fees, similar to linear bundles, some streamers like Hulu and Tubi share ad revenue with their content partners, which may have constraints. Other streamers with fixed cost agreements like Netflix and Disney Plus would have more flexibility and better margins on the advertising side, he wrote. 

“Distributors in the streaming world are also likely to have a more integral role in ad measurement and delivery than in the legacy cable network world,” Venkateshwar wrote. “As a result, compared to the legacy cable bundle world where distributors got the arguably the worst spots (typically at the 26th and 56th minute every hour, when viewership typically dips), distributors may get more leverage in a streaming world.”

Aggregation is the Thing

While Venkateshwar believes that bundling streaming services is all well and good, the real value lies in aggregation. While Verizon will probably bundle streaming video, Peloton, music and gaming under one low, low price, the real driver of value is its wireless service. According to Venkateshwar’s thinking, bundling is more about convenience and adding value to another core service, while aggregation is about the core offering and driving more engagement.

In that scenario, for example, Amazon could embed its Amazon Fire Operating System into TV brands and bundle streaming services with Amazon Prime, giving consumers the benefit of lower pricing, enhanced content discovery and a potential link to the online shopping service. Google could do the same with Android TV and Apple with Apple TV Plus. 

That could be a scary scenario for cable networks, because the best aggregators make underlying applications irrelevant, like Google did with Yahoo, Spotify did with record albums and Netflix did with TV networks, the analyst wrote.

“... now Android TV and other [operating systems] may make Netflix less relevant as a standalone brand,” Venkateshwar wrote, adding that this will force streaming services to work harder to establish their brands. While Disney appears to be the leader on that front, the impact of other brands like Peacock, Pluto TV, Tubi or even Apple TV Plus is less clear.

While it seems like only the huge tech players will come out on top of the aggregator heap, the analyst was somewhat encouraged by Comcast’s mix of assets -- broadband-only service Flex, Peacock, a scaled ad team, strong content base and distribution scale. But he worried that the slow pace of its Flex product rollout in its own footprint could indicate it’s not quite ready to match up with the tech giants. 

“Overall, while bundling is easy to do, it is quite anachronistic given content distribution technologies today,” Venkateshwar wrote. “We believe the real value of bundling will be realized by aggregation, which is still in its very early phases. As this model evolves, content discovery for TV shows may not be very different than, say, Google search, even if the process is more passive for consumers.” ■ 

As video subscriber losses continue to rise across the board in the pay TV segment, Comcast Cable CEO Dave Watson and Charter Communications chairman and CEO Tom Rutledge told a virtual industry audience Wednesday that a new double play that ties wireless and broadband is beginning to emerge. 

Comcast lost about 491,000 video subscribers in the first quarter, up from the 409,000 it lost in the prior year and a trend that Watson said would likely continue. While the cable operator will continue to focus on high-end video subscribers who want a full package of video, at Wednesday’s MoffettNathanson Virtual Media & Communications Summit, Watson said the company is not ignoring the growth at its wireless unit.

Comcast launched Xfinity Mobile in 2017, part of its MVNO agreement with Verizon Communications, and has grown the business to about 3.1 million customers. The mobile unit had its best quarter ever in Q1, adding about 278,000 customers (its highest quarterly number) and becoming profitable for the first time.

Watson said the mobile product has “energized our sales channels,” including digital, call center agents and retail. 

“I think there’s definitely an opportunity to combine an elegant and seamless broadband- mobile offering. We’ve done it in a whole bunch of our go-to-market approaches and for the right segment, it's a great way to start the relationship,” Watson said. He added that tacking on the Xfinity Flex product to that double play could make it even more attractive. 

“That is a really unique proposition that we have that no one else has,” Watson continued.  “Over time, look for us to do more of that.”

Later on in the conference, Rutledge said that wireless is an integral part of the company’s connectivity strategy, adding that that ultimate goal is to converge wireless and broadband.

Charter, which also has an MVNO agreement with Verizon for its Spectrum Mobile service, added about 300,000 wireless customers in Q1. It ended the quarter with 2.7 million wireless customers. 

“I look at our opportunity to create customers that buy mobile services, and create those customers along with the capabilities that we have added through our broadband network, which are vast, and to converge the product itself into a single product,” Rutledge said. "If you look at the total prices that people pay for these products today, I think we could gain significant market share at much lower pieces than people are currently paying. I think mobile represents the opportunity for us to save people money and give them better products than they have today. .... The combination of the product is bigger than the component pieces.”  

Rutledge added that profitability for Spectrum Mobile isn’t that far off. 

“They [Comcast] reached a point that we will reach,” Rutledge said. “From a break even perspective, we said previously that about 2 million customers is all we needed to make the business profitable. That’s true and that proved out to be true. The difference between us and Comcast at the moment, I believe, is where we are in the cycle and how much new growth we have versus how much base.” 

Rutledge added that he expects mobile to be a real contributor to profitability going forward.

“To the extent  you create a customer that raises your ARPU but saves the customer money on their household spend and creates additional EBITDA per customer for you, that both allows your existing base to be more profitable and your incremental growth opportunities to be greater because you more valuable, that’s a really attractive model,” Rutledge said. “I think that’s what mobile does for us.”

On the flip side, some have complained that the emergence of streaming apps and the trend toward content companies shifting content -- like sports -- to their direct-to-consumer products, adds more pressure to carriage negotiations.   

“Obviously it changes the dynamic,” Rutledge said, adding that in the current climate, content distributors would be “much better off not blowing up the existing model just now," mainly because it generates much more revenue than its streaming counterpart. 

The dilemma, he continued, for content companies is in deciding whether to keep raising linear prices while premium content is available on streaming apps and risk being dropped by traditional distributors, or maintaining or lowering rates to preserve that distribution relationship. 

Rutledge guessed that content companies would choose the second route, which would mean less money “but it’s still better than the alternative.”  

And despite continued pay TV subscriber losses -- MoffettNathanson estimates that pay TV is losing about 7% of its video customer base per year -- Rutledge believes there is still some life left in the traditional linear video business.

“It’s hard for me to believe that there won't be linear TV at all in the near term,” Rutledge said. “I think the model is under pressure, it's been under pressure for a  long time. I don’t think it’s about to collapse, but I do think it's shrinking rapidly. I think the most likely scenario is that rate changes will moderate and you’ll still have a pretty expensive linear model. I don’t see it just collapsing.”  

Liberty Media chairman John Malone said his company’s failed attempt to purchase the 21 Fox regional sports networks put up for sale earlier this year by the Walt Disney Co., would have helped to right what he sees as one of cable’s biggest mistakes -- allowing content providers to force distributors to carry programming bundles that are too large and too pricey.

Liberty was one of several bidders for the Fox RSNs, which were eventually won by Sinclair Broadcast Group and a minority partner -- Byron Allen’s Entertainment Studios -- for about $9.6 billion.  Liberty had reportedly teamed up with Major League Baseball in its bid, but backed off when the price became too high.

At Liberty’s Investor Day in New York Thursday, Malone confirmed that Liberty teamed with MLB on a bid, which he said would have been “affordable, and less disruptive.”

Related: RSN Redux 

“It was designed essentially to be a little more rational, and not to allow retransmission consent to be confounded with regional sports,” Malone said. “The unfairness of that leverage would just make the overpricing of the big bundle that much worse.”

Malone continued that he saw the cable industry’s allowing networks to make carrying all of their networks across the board as a contractual obligation, as a mistake.

“That really turned the negotiation into a tax,” Malone said. “Once there was competition among distributors and a fear that distributors would lose market share if they didn’t carry pretty much everything in the sports area, it really just turned sports programming into a tax.”

He added that in addition to enriching players and distributors, that practice also drove the price of the big bundle beyond the economic limits of many households.

“If you didn’t have that component in the cost of content, you would probably see far fewer cord cutting for economic reasons,” Malone said.

While Dish Network managed to report a solid Q3 even after dropping the Fox RSNs in July, Malone said satellite’s economics are different, because in many markets it is the only viable video alternative. For other distributors with three or even four competitors, it would be tougher to survive without the channels.

Late Sen. John McCain (R-Ariz) had proposed a solution about a dozen years ago, where any network that was priced wholesale over a certain threshold, would be made available a la carte by the distributor.

“The industry had a chance to support that and did not,” Malone said. “It was a huge mistake.”

Charter Communications chairman and CEO Tom Rutledge has never been afraid to tout his belief in the continued strength of the cable bundle to about anyone who would listen, and this week was no different, even as his cable company doubled video losses in the most recent quarter. In Charter’s Q2 earnings conference call with analysts Friday, Rutledge again voiced his belief in the continued power of wrapping video, voice and data products together, blaming the perceived decline of video on reckless programmers.

Charter lost about 150,000 residential video customers in Q2, more than double the 73,000 it lost in the prior year. But Rutledge refused to blame the decline only on the trend toward smaller video packages from streaming services. According to him, equally at fault are content providers who have wrecked what had been a working model by letting customers share passwords for streaming services and making content available for free on their own apps and websites.

“Our video strategy today is to not look at video as a standalone business,” Rutledge told analysts on the call, adding that Charter sells connectivity. And to him, connectivity involves all products, not just broadband. Connectivity to the internet, to content networks and to each other via broadband, pay TV and wireless.

“There is still a lot of value in the bundle to a lot of consumers,” Rutledge said. “The problem with the bundle of video today is that the content companies that supply it have essentially put their services for free available everywhere, through TV Everywhere, excessive streams, password sharing, and free over the air television. It’s hard to compete with free.”

That shouldn’t be a surprise to anyone who has followed Charter for any length of time. Rutledge has consistently lamented password sharing among customers as a major pain and other executives may feel the same way, but they don’t say it nearly as much. That has attracted some ridicule from some analysts, but for the most part many see the focus on broadband as a strength for cable.

[embed]https://twitter.com/RichatTBD/status/1154739211897114625[/embed]

“We look at video as an attribute of our overall customer relationship,” Rutledge said. “We want to have the best video services of all the kinds available and make it easy for consumers to consume our product. We look it as an attribute of the connectivity relationship we have with the customer.”

That’s nice, but there is no denying that many cable operators are increasingly looking at video as more of a nuisance that is getting in the way of selling more profitable broadband service. Every major provider has more broadband customers than video customers, and the gap will only widen. Sure, they still want the video subscribers that buy the Platinum package with all the premium channels and spend $300 per month, but they’re getting more and more annoyed with customers that want really narrow packages for low prices that they are powerless to provide.

I have personally heard some operators say that they don’t even care that much about video price increases anymore -- if the price of a network or a broadcast station is too high, so what, they can just pass it along to the customer. And if the customer wants to switch video providers, so be it. Chances are cable broadband is still the best service around, so the operator just converts that subscriber to a broadband-only customer paying $65 per month for service instead of the bundled price of $45 per month. And there is considerably less hassle.

That may be a bit of an exaggeration, but it is getting clear that video is becoming less and less of a focus. MoffettNathanson principal and senior analyst Craig Moffett has been a cheerleader for accelerated video losses -- in one report he said a broadband customer is seven times more valuable than a video customer. After Charter reported its Q2 results, Moffett noted that its video losses accelerated to 2.2% in the period from 1.7% in Q1, but were still less than half the 5% rate of decline for the rest of the industry.

And it should be noted that customer relationships are on the rise, mainly because of broadband growth. Charter added 203,000 customer relationships in Q2, up from 196,000 last year. And with that, profit margins should grow as video-connected costs fall. Moffett noted that Charter’s cost of service decreased by about 1% -- the second consecutive quarter of declines -- and marketing costs were flat.

Related: Moffett: Let Video Find its Own Level 

On the conference call, Rutledge said he doesn’t like raising video prices for customers, mainly because they don’t understand that the increase is coming from the content provider, not the distributor. And that has an impact on how that customer perceives the service provider as a whole. Think about that for a second. Look at the customer satisfaction surveys over the past few years and how customers say how much they hate their cable provider and love their broadband service, not realizing they are the same company.

“I don’t like raising prices to our customers,” Rutledge said. “Customers don’t know where the price increase is coming from and they attribute it to us and that affects our overall satisfaction and our overall relationship and our brand equity so to speak with the customer. I think hitting rates and asking people to disconnect is not a very attractive way to manage a video business. On the other hand, if you don’t fight the programmers to maintain some sort of price integrity for the customer, they’ll pass through a lot of product. It’s a balancing act from my point of view.”

Now programmers will argue, correctly, that developing and buying high quality programming costs money, and pay TV wouldn’t be pay TV without content. Broadcasters have said consistently that they get about 12% to 14% of the economics while representing 35% of total viewership. But I think they are missing a key point here. Cable operators aren’t really saying that their programming isn’t worth much, they’re saying that customers don’t want to pay that much for it. And the blame for that lies squarely in content’s court, according to Rutledge.

“What I really wish is that the price value of programming wasn’t being destroyed by the programmers,” Rutledge said. “The reason I say that is, if you do a 10% programming price increase and you lose 10% of your customers, you don’t really get anywhere and yet you’ve alienated a lot of people. That is actually happening.”

Rutledge argued that programmers don’t fully realize price increases on their revenue line because they make their product available for free, either directly or by ignoring what he claims is a “massive” amount of password sharing. And aside from the obvious financial pitfalls, those practices have other consequences.

“That changes the price value relationship with the customers and makes it impossible [for operators] to raise prices and generate revenue,” Rutledge said. “My wish would be that the content industry would manage their content and their copyright to their own benefit instead of pushing through price. We still think we have a lot of video customers and they don’t want to have price increases, so I expect continuous fighting for the foreseeable future.” 

DENVER -- With the pay TV eco-system losing around 1.4 million customers in the first quarter, per estimates, the smart money wouldn’t seem to be on the bundle coalescing anew.

But that was the very idea put forth by a couple of pay TV industry pundits at a video trade show in Denver this week.

“The return of the big bundle—that’s where we’re headed,” declared Scott Ehrlich, VP of emerging platform Content, Sinclair Broadcast Group, speaking on a panel Tuesday. “Everything that gets disaggregated gets re-aggregated.

According to fellow panelist Gary Schanman, senior VP of products for Charter Communications, many customers are coming to the realization that they can’t beat the value of his company’s managed network video services on price, now that many virtual MVPDs have upped their monthly fees.

“We still think we have an advantage,” Schanman said.

Meanwhile, the panelists said that media companies—now charged with distributing, marketing and doing pretty much everything else needed to get their shows seen in direct-to-consumer models—might soon miss the ease of the pay TV bundle.

“It’s really hard. You’re going to see a lot of guys try to get into [direct-to-consumer], blow through their libraries, and then blow through their budgets,” said Bob Greene, managing director of business development for Liberty Global.

“You’re going to see them return,” he added.

“How much money do you save wholesaling through a company that provides you with delivery, marketing and customer service?” said Ehrlich. 

Indeed, at the Pay TV Show, a recurrent theme has been that the rumor of the bundle's demise is overblown. 

Also speaking at the Pay TV Show, Wolfe Research analyst Marci Ryvicker said that cord cutting will eventually "even out," with around 70 million users remaining in the linear ecosystem. 

"I think the bundle is going to stick around for a while. People will start to come back," added Samantha Cooper, executive VP of distribution and development for Viacom, speaking on a Wednesday morning panel. 

Mergers and acquisitions, fueled by a drive to consolidate mobile communications operators, surged in 2014 in Europe, as big and small names vied to capture the last leg in a quadruple play offering for consumers.

Total deal volume in Europe last year was about $901.4 billion, up 40.5% from $641.4 billion in the prior year, according to Mergermarket. It was the highest value since 2008, the company said.

Dominating the sector were deals involving telecommunications companies. Telecom, Media and Technology deals accounted for about $168.2 billion in volume in 2014, up 24% from the prior year and representing the largest sector in terms of M&A.

While mobile aspirations fueled European deal-making, consolidation and the search for scale economics were the sparks that sent transactions in the United States to record highs. Led by Comcast’s pending deal to acquire Time Warner Cable (which Mergermarket valued at $68.5 billion but Comcast places at more like $67 billion) and AT&T’s $66 billion purchase of No. 1 satellite-TV service provider DirecTV, U.S. TMT deals were worth a collective $302.2 billion, up 24% from 2013, when total deal value was about $284.9 billion.

U.K. DEAL LEADS PACK

Leading the European TMT charge was BT’s (formerly British Telecom) $18.8 billion acquisition of mobile carrier EE (formerly Everything, Everywhere). The acquisition was seen by many as an effort by BT, already the largest telephone carrier in Britain, to further solidify its wireless position in the country.

In its report, Mergermarket said ongoing consolidation in the telecom industry helped the TMT sector account for the biggest chunk of M&A activity.

“One of the trends currently shaping the sector is the convergence toward the ‘quad’ model, with operators bundling together Internet, TV, landline and mobile services,” Mergermarket said.

Pivotal Research Group principal and senior media & communications analyst Jeff Wlodarczak said recently that consolidation in the European telecom sector is well underway, adding that competition in the sector is “brutal.”

“The European wireless [companies] would love to consolidate,” Wlodarczak said in a recent email message. That was obvious in the top five deals in the sector, three of which were mobile-capacity plays — BT’s; Numericable’s $15.9 billion buy of Vivendi SFR; and Spanish carrier Telefonica’s $11.6 billion purchase of E-plus.

Even the non-mobile deals had a quad play feel to them. European wireless behemoth Vodafone, flush with the $130 billion it received from its sale of its 45% interest in Verizon Wireless back to the U.S.-based carrier, continued its quest to snap up cable properties, agreeing last March to buy Spain’s Ono for about $10 billion. That deal built on Vodafone’s other big cable buy — German cable giant Kabel Deutschland in 2013 for $10.1 billion.

German cable has been a hotbed of M&A activity over the past few years, and another player could enter the deal fray later this year. Tele-Columbus, the third largest German cable operator, behind Kabel Deutschland and Liberty Global, is slated to launch an initial public offering in the next month or so, raising about $300 million to pay debt.

Tele-Columbus, which has been an acquisition target in the past — its 2013 deal to be acquired by Kabel Deutschland was rejected by regulators — has said it is not pursuing a sale in line with the IPO. Whether that means it will be an acquirer remains to be seen. It has said the IPO will help fuel its growth strategy as well as pay down debt. But already the company has said it is planning to offer its own mobile service later this year.

LIBERTY LOOKS FOR CONTENT

Liberty Global made a widely anticipated play for the remaining interest in Dutch cable operator Ziggo for $13.7 billion. But the Denver-based international cable powerhouse has been said to be on the hunt for programming and production assets (it purchased U.K. producer All3Media for $930 million in a joint deal with Discovery Communications last year) even as it sold programmer Chellomedia to AMC Networks for about $1 billion.

At a recent industry conference, Liberty Global CEO Mike Fries said any content deals the company engages in are a means to one end — driving distribution.

It’s been speculated that is Liberty eyeing German over-the-top service Maxdome, and in March it announced plans to launch its own wireless product in partnership with other carriers (so-called mobile virtual network operators, or MVNOs) that should help give it a quad play. Outside the continent, Liberty is gearing up to launch a tracking stock, Liberty Latin America and Caribbean Group, which could serve as a deal currency in that part of the world.

Wlodarczak said recently that he expects Liberty Global to continue to seek out deals in what he sees as a still favorable regulatory climate.

“I still see lots of little deals for [Liberty Global] and the euro regulators seem to be keeping deal approval at the EU [European Union] level, which as we saw with the Ziggo deal, is beneficial if LGI wants to, say, buy more cable assets in Germany, rather than the local level which tends to be far more difficult,” Wlodarczak said.

Cord-cutting has proven to be much less of an issue than many people were predicting just a few years ago, prompting some analysts to raise their projections for multichannel subscribers. But if the cord isn’t getting widely cut, the business models that have long sustained the multichannel TV industry are showing some signs of fraying, with the launch of new over-the-top ventures from Sony, Dish Network, CBS and HBO.

How successful these products will be remains open to question, given the problems faced by some earlier OTT offerings like Redbox Instant, which was shut down last year. But the plans are a clear sign of widespread unease about the growth potential of multichannel TV in an era in which Magna Global’s upwardly revised multichannel counts still show a drop from 103.6 million in 2014 to 102.9 million in 2019.

In the light of those worries, we hope that Multichannel News’s annual Viewer Watch Special Report, with its focus on the impact of the changing use of video, will be even more valuable than ever in helping our readers navigate changing audiences in 2015 and beyond.

As in earlier years, the report includes an extensive compilation of data covering virtually every aspect of the pay TV industry, from trends in multichannel subscribers and over-the-top homes to online video ad projections and the use of new consumer electronics devices. In addition, it includes two features based on extensive interviews with more than two dozen top TV executives and researchers.

As always, the goal has been to dig deeply into the data to uncover insights that often upend conventional wisdom about consumer trends and to provide readers with a deeper understanding of how the business is really changing.

Like previous versions of this annual report, this year’s Viewer Watch was made possible with the help of a number of researchers. Among the research organizations that were particularly helpful in providing data were Horowitz Associates, Magna Global, PwC, Frank N. Magid Associates, Nielsen, Fox Cable Networks (which compiled some Nielsen ratings data for this report), and NBCUniversal president of media research and development Alan Wurtzel, (who provided some charts).

Contributor George Winslow compiled the data, conducted the interviews and wrote the articles.

To view the full Viewer Watch report, please click here.

With each new announcement of a service going “over the top” of traditional cable systems, investors and consumers, persuaded by the national media, start to believe the breathless confirmation that this time we are witnessing nothing short of a TV revolution — a new way to buy and watch the medium.

When HBO and CBS recently unveiled plans, the august New York Times called the moves “a watershed moment for Web-delivered television, where viewers have more options to pay only for the networks or programs they want to watch.” Not hardly.

The reality is much more mundane, and if the cable industry doesn’t make strategic missteps, the bundle will continue to dominate the pay TV-buying public’s appetite for years. The hopeful fantasy that somehow consumers can one day choose to buy channels on their own at an affordable price is just that — a fantasy. It’s not a real business that will rival cable operators.

Cracks are appearing in the bundle for sure, but the current spate of pronouncements about OTT are simply defensive plays by programmers claiming their space in the streaming future, not a sign of true disruption.

The appearance of cord-cutters (still at only 2% to 3%), is testament to the changes coming in video-content delivery, but how fast and how much depends on how you define OTT. Is over-the-top merely the delivery of video signals over the Internet by services such as Netflix, Hulu and Amazon Prime, or is it essentially a la carte TV fare over the Internet, where viewers who cut the cord to their pay TV providers pay for only the programs they watch?

Companies like Roku and Apple have respectively sold 10 million and 20 million streaming-media devices, which allow some form of OTT video to viewers. And at press time, at least three services — from Sony, Verizon Communications and Dish Network — are scheduled to be released over the next several months. Indeed, the market for streaming media players is expected to grow from 24 million this year to 44 million by 2017, according to research firm IHS.

Although some of those offerings will provide lighter packages of programming for lower prices, it won’t be true “a la carte” — the ability to select only the channels you want. Dish’s OTT offering, expected to be introduced some time next year, would cost about $30 a month for 30 channels, according to reports. That’s not exactly a bargain — and it’s not a la carte, because it’s unlikely consumers will be able to pick and choose between packages.

The debate over a la carte service has followed the cable and satellite industries almost since their inception. But it is unfathomable, with the oligopoly now in place, that one day a cable customer will be able to buy Disney Channel but not ESPN, Comedy Central but not MTV, and USA Network but not Bravo and keep the bill at a reasonable level. Giant cable programmers won’t allow it. And MSOs will simply pass the costs along.

Moreover, cable networks would never — repeat: never — risk the hundreds of millions of dollars in affiliate fees from pay TV distributors to make a few bucks on the side via a new OTT player with a more limited reach. A la carte is not here now, and it’s not coming for at least the foreseeable future.

What made the HBO and CBS announcements different is that they weren’t simply carriage deals with a new OTT provider — Viacom already did that with Sony in September — but were instead the first examples of individual networks selling directly to the consumer.

Beyond the hype of those announcements, the offerings are actually quite limited in terms of how they can be accessed and what they will offer, at least at the outset.

Why will the OTT newcomers, buoyed by consumer antipathy towards cable and satellite operators, fail to be a real business rival to the entrenched cable and satellite and telephone monopolies? Here are five reasons:

OTT offerings will always be weaker. While HBO and CBS have unveiled offerings that at first glance seem to be freeing, they are carefully geared toward maintaining the status quo. In announcing the HBO OTT service at parent Time Warner Inc.’s Investor Day earlier last month, HBO chairman and CEO Richard Plepler said it was “time to remove all the barriers” to HBO. Problem is, shortly after making that statement, Plepler spent a goodly amount of time pointing out all of the barriers — it would at first be marketed to the 10 million broadband-only customers of its cable and telco-TV affiliates; operators would handle all billing, customer service and customer control; and the service would be sold in partnership with distributors.

The CBS offering has its own restrictions — there will be no sports available through the service. And to get any live streaming, customers must live in one of 14 cities with a CBS-owned-and-operated station. So, for $5.99 per month a customer can get access to their local news if they live in a CBS market, can watch next-day airings of 15 primetime shows such as The Big Bang Theory the day after they air, access full past seasons of The Good Wife, Blue Bloods and Survivor and stream 5,000 episodes of such older shows as Cheers and Star Trek already available on other subscription-VOD services such as Netflix, Amazon Prime and Hulu.

For other programmers thinking about going the direct-to-consumer route, there are other barriers, mainly in the existing subscription VOD deals they already have with existing OTT players for their library content.

According to Sanford Bernstein media analyst Todd Juenger’s recent report, The Dawn of the OTT Era: We Think Not, consumer expectations for a network-delivered OTT service are simple — they would receive everything that is shown on the network, live and on-demand. “But most networks aren’t in a position to offer anything close to resembling that,” he wrote.

Existing deals for library content with SVOD providers like Netflix could restrict what a network OTT service could offer, creating gaps in the programming day. Non-exclusive deals for content also could lose their luster in the future.

“We doubt Netflix will have much interest in programming that is also available on an SVOD platform directly from the network,” Juenger wrote.

An OTT a la carte service would cost too much. Were the pay TV industry one day to magically convert to an a la carte business model, the annual revenue would be cut in half, to $70 billion from $140 billion, according to Needham & Co. media analyst Laura Martin. Others have said even that figure is conservative.

The problem with a la carte is that it completely unravels television’s existing business model, currently anchored in the ability to sell networks to a distributor for a fee based on the number of subscribers that distributor has, whether individual subscribers watch the channels or not. For instance, in an a la carte world, ESPN wouldn’t cost a consumer the $6.04-per-month license fee paid by the local cable company — it would cost perhaps $30 per month. What is often left out of the a la carte conversation is that networks aren’t going to move to a model that makes them less money.

So ESPN, which is expected to receive an estimated $6.9 billion in affiliate fees alone this year, based on the 95 million homes in which it is available, will simply kick up that fee to more than $20 per month for the estimated 30% of TV homes that would be likely to subscribe to the channel.

Add in another $10-per-month charge to make up for lost advertising revenue and that’s already close to half an average monthly cable video charge of $75 per month. And that’s just one channel. Add another $10 per month for regional sports networks and so-called pricey networks like TNT, Disney Channel, TBS, Fox News Channel and USA Network, and the price could rise to $50, not including additional charges for lost advertising. The average cable package has about 150 channels and costs about $75 per month.

“If you piece it out, it [the monthly charge] gets into triple digits,” Wunderlich Securities media analyst Matt Harrigan said.

Robust network OTT services would destroy the very bundle programmers have worked so hard to create. Giving consumers the ability to buy channels individually would leave no incentive to keep a pay TV package with a distributor, so that revenue would essentially evaporate.

Some cable operators have challenged the practice of bundling, in which a programmer lumps lesser-watched networks together with more popular channels. The programmers have countered by saying individual networks are available for purchase by distributors, who say they are priced prohibitively — in some cases buying a single network that was bundled with others would cost significantly more than the whole package, according to some MSOs.

While some cable, telco and satellite-TV providers have said they would welcome a la carte, they don’t want it either. As Juenger put it, why would a company with high fixed costs like cable ever want to move to a model where those costs stay relatively constant, but revenue is cut in half? While broadband has been a profit center for years — margins for high-speed Internet service approach 90% in some cases — a full departure from the video business would commoditize the industry. That would leave operators with only one arrow in their quiver to compete with — price — and make them vulnerable to deep-pocketed competitors that could drastically undercut their monthly charges. (Google, anyone?) While some of the larger MSOs could weather that storm, smaller operators would wither.

OTT a la carte would be too complicated. According to Sanford Bernstein’s Juenger, OTT a la carte would create a “horrible mess of consumer interfaces.” If you think consumers are confused by the TV apps available to them now, just think how dumbfounded they would be if they had to sift through apps for every network, or remember which networks were owned by which network group if they were bundled together.

“There would be no unified search,” Juenger wrote. “No recommendation engine. Compare that to Netflix or Comcast X1, with one unified search and recommendation engine across all forms of content delivery. The a la carte, OTT world would be horribly complex and frustrating.”

OTT a la carte might mean higher broadband prices and more regulation. According to MoffettNathanson principal and senior analyst Craig Moffett, OTT a la carte would require a huge amount of bandwidth, which could finally open the door for usage-based pricing for the cable industry, or at least allow operators to raise prices for broadband to make up for lost video revenue.

It could also give cable operators the green light to charge OTT providers and aggregators for transport, something several operators have already done with Netflix amid some controversy. While that would seem to be a benefit for distributors, Moffett warned “there is a risk here that cable will win the battle, but lose the war.” Higher prices and transport fees could force the Federal Communications Commission to implement more onerous regulation.

“The prize is whether or not you can charge for the transport function in an OTT world,” Moffett said in a recent call with clients. “And if you see OTT start to accelerate, even a little bit, what’s likely to emerge from the regulatory process is a limitation on the cable operator’s ability to respond to OTT threats through the pricing of broadband. You can’t just jack up the price to everybody because the price increases would be unsustainably high, which would invite more regulation.”

That could include a move toward dreaded Title II regulation, which would characterize cable companies as common carriers and would severely limit further investment in infrastructure.

WiFi’s signal is getting clearer.

The local-area wireless broadband technology already carries more Internet traffic to consumers’ smartphones and tablets, laptops and PCs than licensed wireless and wired connections combined, according to data from the National Cable & Telecommunications Association.

Earlier this month, the WiFi Alliance, a trade group that promotes the technology and certifies products for interoperability, unveiled a set of “Passpoint” certification features that enable WiFi networks to look and behave more like cellular networks (see “Cable Inches Toward ‘WiFi-First,’ ” Oct. 13, 2014).

ONE STEP CLOSER

Passpoint puts WiFi one step closer to becoming a carrier-grade network. This is important because if cable operators want to increase what they charge their residential and commercial customers, they will have to offer them reliable and seamless connectivity.

It’s a scenario similar to cable’s entry into the telephone business in the 1990s. Operators had to prove they could offer a service that was comparable to, and ultimately better than, what the incumbent telephone companies offered.

In May, the Federal Communications Commission made an additional 100 Megahertz of wireless spectrum in the 5-Gigahertz band available for unlicensed WiFi use. This gave carriers and MSOs some much-needed bandwidth to operate WiFi networks without interference and bottlenecks, according to Justin Colwell, CableLabs vice president of access network technologies.

More FCC auctions are expected, which will benefit cable operators wanting to expand their public and private WiFi offerings going forward. The majority of consumer phones and tablets can now live up to their potential with this new spectrum, Colwell said, so the ability to build a bigger and better wireless offering will serve as a value-added service to consumers.

The expansion and interconnection of wireless networks will also likely be a financial boon for operators, experts said.

It’s unclear just how much money can be generated with WiFi networks, but everyone seems to want get into the game. Comcast chairman and CEO Brian Roberts extolled WiFi prospects in a presentation at the Bank of America Merrill Lynch Media Communications and Entertainment conference in Los Angeles on Sept. 16.

“We have a tremendous asset in WiFi,” Roberts said. “Our relationship with our customers and the people who are not our customers understanding how great and powerful a WiFi connection can be … is a great thing for our company and our investment.”

In addition to its pledge to activate 8 million hotspots in its service territory by year’s end and joining with Cablevision Systems, Time Warner Cable, Bright House Networks and Cox Communications in offering customers free access to 250,000 hotspots across the country, Comcast has been busy laying the groundwork for other partnerships.

The company is offering two Asian cellular operators access to its WiFi hotspots in the U.S. Customers of Japan’s KDDI and Taiwan Mobile can use Comcast’s Xfinity WiFi hotspots when they travel to the U.S., reducing the need for their subscribers to pay expensive international roaming charges.

INTERNATIONAL PACTS

Financial details of these deals have not been released, but the pacts serve as an example of the potential windfall WiFi offers to operators.

Comcast has also cut a peer-to-peer deal with Liberty Global whereby the European MSO’s customers can use Comcast’s WiFi free of charge when traveling in the U.S. and Comcast’s customers can use Liberty Global’s hotpsot WiFi services free when they travel in Europe. Right now, it’s a fair exchange of assets and Comcast executives declined to discuss the deal or its long-term implications for the company’s business strategy. But it is another sticky service designed to keep customers happy with and tied into their service.

Most U.S. WiFi users currently connect at home, CableLabs’s Colwell said. But that’s changing rapidly as consumers increasingly want to take their services with them as they venture outside. And operators want that, too.

Yet burgeoning use of cellular wireless Internet devices has created a logjam for providers, who are increasingly offloading their data traffic onto WiFi to alleviate the burden. A Cisco Systems study has predicted that 52% of all worldwide mobile traffic will be offloaded to WiFi by 2018; in the U.S., that number jumps to 64%.

The increase in mobile data traffic will likely result in new and unlikely partnerships and mergers, with cable operators sitting in the catbird seat, some observers have predicted.

“The time is coming when WiFi will shift from being a ‘secondary’ network to being a primary one,” MoffettNathanson partner and senior analyst Craig Moffett wrote in an Oct. 6 research report on WiFi. “[I]nstead of thinking of WiFi as an alternative to cellular everywhere WiFi is available, we will instead to begin to think of cellular as a backup network needed only when WiFi is not.”

Some cable and cellular companies are already making money with WiFi services. Raleigh, N.C.-based Republic Wireless is offering a WiFi-first service starting at only $5 a month and other wireless providers, including T-Mobile and Verizon Wireless, are prepping their own WiFifirst services as well. But some industry experts think cable-enabled WiFi will be in the driver’s seat when it comes to controlling the spectrum and the dollars derived from offering the service to consumers and businesses.

While much has been made about consumer WiFi services, a big potential revenue generator for cable lies within the commercial sector. Comcast is already offering WiFi services in several public spaces in its service territory, including some subway stations in its hometown of Philadelphia, as well as in some shopping malls.

In Santa Clara, Calif., Comcast is handling the backhaul services for Levi’s Stadium, the new home field of the National Football League’s San Francisco 49ers, with service costs offset by leveraging in-game experiences. Event attendees can order food or drinks and have them delivered to their seats — and receive marketing messages touting deals on goods sold at the stadium.

Bright House Networks recently activated free public WiFi in in downtown Tampa, Fla., as well as the area’s riverfront public parks. It’s free to the public for up to two hours a day or 1 Gb per month. BHN subscribers can access the service for free all of the time.

Once a non-BHN customer surpasses the free allocation, there is an option to purchase additional service.

The consumer side of the business is somewhat easy to implement, as dual private/public routers are deployed in millions of customers’ homes, CableLabs’ Colwell said. The business becomes a bit more complicated and expensive on the commercial side of the equation, though. There are things operators can do to mitigate costs using automated planning and project management solutions from such companies as Amdocs.

Moffett predicted the revenue that could be derived from both residential and commercial WiFi justifies costs. The fourth leg of the cable telecom industry’s stool would be complete.

With a one-two punch last week, HBO, the most powerful premium cable network, and CBS, the top-rated broadcaster, delivered a staggering blow to traditional TV with their planned over-the-top offerings, giving consumers the ability to access top shows without the burden of a pay TV subscription.

Whether these moves lead to a knockout of pay TV’s traditional business model is still open to debate, but one thing is certain: More will follow.

And soon.

Home Box Office chairman and CEO Richard Plepler unveiled HBO’s breakaway as part of Time Warner Inc.’s overall Investor Day in New York, telling analysts and investors that the time was ripe to tap the estimated 80 million homes that don’t subscribe to the service.

Plepler said the rollout of the over-the-top service — slated for some time next year — will initially target the 10 million broadband-only homes across the country. While he offered few details on pricing and content, people familiar with the offering said it will closely resemble the premium network’s existing HBO Go online service and will be priced similarly to a traditional pay TV HBO subscription.

A day after Plepler announced HBO OTT, CBS announced a $5.99 per month online offering dubbed “All Access,” allowing subscribers to watch live streams of local CBS TV stations in 14 markets and broadcast-network shows like The Good Wife and Blue Bloods a day after their original airing. While the offering doesn’t have live sports (no National Football League games) or same-day network shows — the two main reasons for watching broadcast in the first place — it could have appeal to binge-watchers through on-demand access to CBS’s vast programming library. All Access will offer more than 5,000 episodes of classic network shows, including every season of such series as Star Trek, MacGyver, Twin Peaks and CSI: Miami, according to CBS.

While cable operators have anticipated this event for years — and some say privately that it was baked into previous carriage agreements — questions still abound. Here are some answers.

The services won’t lead to widespread cordcutting. On the surface, it would appear that the ability to stream HBO without a pay TV subscription would be an open invitation to cut the cord, but HBO has put some checks and balances in place that could minimize the impact, at least initially.

Plepler said HBO will initially target the OTT service to the 10 million broadband-only homes in the country, and it will market the service jointly with its distribution partners.

Sources familiar with HBO’s plans said cable, satellite and telco TV distributors will retain control of the customer and will handle all billing and customer service. HBO OTT will be priced similarly to the traditional TV product, sources said.

Analysts believe that the initial market for the service is the 4 million to 5 million broadband-only homes that already subscribe to a streaming service like Netflix.

But once those broadband-only customers are exhausted, that leaves the door open to targeting pay TV customers directly, which could lead to some cord-cutting by customers who want to downgrade their packages.

Sanford Bernstein media analyst Todd Juenger said he doesn’t believe the HBO OTT offering will lead to widespread cord-cutting, but added it could cause some households that would have become pay TV subscribers to postpone taking the plunge.

“We very much agree that the number of households who subscribe to pay TV, just so they can get HBO, is zero or close to zero,” Juenger wrote. “But substitutes to pay TV are getting better all the time, and HBO OTT will significantly increase the quality of the cordcutting option, especially if other competitors respond in kind. And they will.”

The CBS offering is a little trickier. With minimal live TV and no sports, All Access is significantly less compelling than watching the network through a pay TV subscription, or for free over the air.

Content owners — and distributors — will unbundle networks. Programmers routinely bundle their lesser-watched networks in with their more popular channels during contract negotiation time, essentially forcing distributors to carry (and pay for) networks their customers don’t watch. While distributors have begun pushing back, Mediacom Communications senior vice president of marketing David McNaughton said if OTT offerings grow, they could serve as the catalyst distributors need to bust the bundle.

McNaughton said that as more networks sign OTT deals — he used Viacom’s recent agreement with Sony for its planned OTT service as an example — it could give operators the opportunity to take certain channels out of their package.

“That enables an MSO or satellite provider to take Viacom out of the package, and then the 10% or 20% of the people that want to buy a Viacom product, they can potentially buy Viacom over the top through another package,” McNaughton said. “To the extent you have more traditional cable properties selling direct to consumers via different ways, it’s going to hasten the debundling of the large super-bundle.”

But that may be wishful thinking — the bundle has served the programming segment well, and content providers are expected to put up a fight to preserve it.

Don’t expect full-blown a la carte offerings, though. While distributors are all for an a la carte model, most programmers are vehemently against the notion of selling their individual networks directly to consumers. For one, the price of each channel could be prohibitive: ESPN, for example, gets $6.04 per subscriber per month from every pay TV customer, according to SNL Kagan, whether they watch or not. Thus, it would have to charge far more a la carte, notwithstanding additional charges to make up for lost advertising dollars.

“As bullish as we are on HBO, we do not believe the average HBO pay TV customer pays effectively $100 per month just for HBO,” Morgan Stanley media analyst Ben Swinburne wrote in a recent note to clients. “Therefore, we do not believe breaking HBO out is a bundle-killer for the preponderance of households.”

While a la carte may be off the table for now, it could lead to more innovative packaging of video and broadband. Already, distributors such as Comcast, Charter Communications, Verizon Communications and AT&T have offered an Internet Plus package — high-speed data and a premium channel like HBO, Showtime or Starz — for a reasonable monthly fee.

More networks will test the OTT waters. Most analysts expect CBS’s Showtime to be the next to offer an OTT package, followed by the third-largest premium channel, Starz. With CBS offering All Access for broadcast, other broadcasters and cable networks are expected to follow suit, but that could be more complicated.

At the Time Warner Investor Day meeting, Turner Broadcasting System chairman and CEO John Martin said his networks could eventually ride on HBO’s OTT coattails, but programmers also want to be careful not to endanger the billions of dollars they receive each year in affiliate fees from distributors.

Over-the-top moves could have other implications for programmers, Swinburne added.

It won’t derail TV everywhere. Moves by CBS, HBO and ESPN to go direct to consumers over broadband won’t derail TV Everywhere, the authenticated online video services offered by MVPDs, but they do amplify their importance as MSOs continue to seek ways to deliver video in formats that more consumers prefer.

MVPDs will need to do a better job executing their TV Everywhere strategies, particularly with their own apps and video-streaming portals, which will be competing in some ways with programmer-developed applications.

“The signs are increasingly that content providers want to do that themselves online,” Colin Dixon, founder and chief analyst of nScreen- Media, observed. “[These moves] by CBS and HBO, and potentially by Showtime down the road, certainly threatens to water down operator portals as a destination for online video.”