Comcast Advertising president James Rooke called the notion that advertisers must choose between putting their money into linear or streaming networks but not both a “false narrative” at the Advanced Advertising Summit Monday, adding that only through collaboration will advanced ad tech get the boost it needs. 

“I think there is a narrative out there at the moment that says hey, you should be putting money in linear or streaming, and it’s an either or, I think that’s a false narrative,” Rooke said at the event, part of NYC TV Week. “The reason for that is because if you’re an advertiser, then ultimately you’re looking to reach your audience, get the maximum reach possible, the most efficient reach possible wherever those viewers are.”

Also: Comcast Finds Campaign Reach Peaks With 20%-30% of Spend on Streaming 

In the U.S. that means going after viewers with traditional TV, satellite, cable and telco video service, as well as cord-cutters who are getting video from streaming SVOD, FAST and AVOD providers.

“If you’re just buying CTV, then you're isolating a large portion of the population, and that seems problematic,” Rooke said. 

Rooke added that although it is clear that traditional linear TV is declining, it still represents the larger piece of the viewing audience and will for the foreseeable future.

“Our view is that traditional linear TV will remain a foundation for a cross-screen campaign,” Rooke added. “We think between 20% and 30% of budgets should be moved into streaming.”

Also: Group M's Gerber Says Measurement is Still Key to Ad Evolution 

In that scenario, linear TV starts to slag off with lighter viewing households. That’s where streaming comes in, he said. According to Rooke, dollars spent on streaming gets 2.5 times better performance and spending dollars on live streaming results in 2.5 times better performance in light TV households. 

“The point is, it’s not a choice of either/or,” Rooke said. “It is how you better plan and then manage optimization of delivery across the fragmented distribution points that you’ve got that’s going to get you to a better outcome.”

Rooke also championed collaboration between streaming and traditional TV outlets, pointing to Comcast’s recent partnership with Charter Communications for its Flex TV streaming service. 

Other pearls of wisdom from the Comcast executive included:

• Better measurement is needed, but Comcast isn’t choosing sides. Rooke said that while measurement may be “broken,” Comcast “is not in the business of picking a winner.” Instead, Rooke said Comcast would rather help stimulate competition and innovation. “We don't want to replace Nielsen, we believe in a multi-currency world that is solving for cross screen. … From a data standpoint, we are willing to have conversations with players to be able to license aggregated viewership data to them, in spirit helping them to solve for that problem.”
• The midterm elections are going to play a big role in Advanced Advertising’s success. Rooke estimated ad revenue from the mid-terms could be $10 billion higher than the 2020 presidential election or about 3.5 times bigger than the last midterm elections. “It’s the strongest category by far,” he said. “We’re gearing up for the window that’s coming up.” He said Comcast is aiming to try to get more of the dollars that overwhelmingly go to local broadcast TV stations.
• Rooke sees the biggest challenge for advanced advertising going forward is the “significant” amount of backend transfer work that needs to take place going forward. “There’s a lot of engine room work that needs to get done to be able to bring the industry to the promised land,” he said. NYC TV Week continues with the Next TV Summit and Hispanic Television Summit. ■ 

Free ad-supported streaming television (FAST) services are all the rage as content providers and distributors look for any way to squeeze profits from streaming video, and though there is a danger that too much of a good thing could once again saturate the market, Barclays Group believes the segment could end up taking share away from more traditional streamers.

The number of FAST services has grown significantly over the past two to three years with services from traditional media giants (Peacock, Tubi, Pluto, Xumo, Vudu and Crackle), hardware vendors — (Freevee, Roku Channel, Samsung TV Plus and LG Channels) and independents (Plex, Kanopy, Hoopla) and more are on the way. Warner Bros. Discovery has said that it plans to launch a FAST service at some point in the future as has Android TV.

Also: More Scripps Channels Go FAST in Deal with Vizio

Low barriers to entry and lower costs for content — most of the services offer classic TV series and older movies — make FASTs attractive to content creators and distributors alike. But in a research note, Barclays Group media analyst Kannan Venkateshwar asked, despite those plusses, is FAST sustainable?

One drawback is the lack of differentiation of content between the services. In his report, Venkateshwar noted that content overlap for FAST services is more than 80%, compared to 3.9% for Disney Plus and 9% for HBO Max.

Also: FAST Usage Was Up 9 points in the First Five Months of 2022

What FAST services lack in content differentiation they apparently more than make up for in availability. In his report, Venkateshwar noted that FAST services may have higher penetration than any single premium subscription service because of the breadth of their distribution, through smart or connected TVs and other means. Smart/connected TV penetration is 87% in the U.S. and 40% globally, and every connected TV has access to the full suite of FAST services as well as streaming offerings like YouTube and TikTok.

Availability is Key

“Access to premium services on the other hand is based on penetration of SVOD services and consumer propensity to pay for multiple services,” Venkateshwar wrote. Although the average U.S. household subscribes to 4.7 streaming services, he added, the one with the highest penetration (Netflix) is at 56% while overall streaming penetration is 85%. 

“This implies that the mix within this SVOD basket consumed by the average household is not constant and there is a lot of switching based on content release schedules,” he continued, adding that it also accounts for the high churn levels of most SVOD services. 

While engagement for individual FAST services is below that of their SVOD counterparts, combined they account for more minutes than subscription offerings. Barclays, citing Nielsen research for one week this year (July 25), noted that together Tubi (4.4 billion minutes), Roku Channel (3.5 billion minutes), Pluto (5.1 billion minutes) and Peacock (3.5 billion minutes), edged out Amazon Prime Video (15.1 billion minutes) and was nearly twice that of Disney Plus (9.6 billion minutes) and almost three times that of HBO Max (6 billion minutes). That gap could narrow further as awareness for FAST offerings increases. That’s also where aggregation services like Android TV, Roku, and Comcast’s Flex offering could become a factor, Venkateshwar wrote. 

Also: David Zaslav and the [Streaming] Deathly Hallows  

“With television viewership increasingly determined by aggregation services and the still growing clutter of thousands of titles across streaming services, we believe content choices are likely to be increasingly determined by the recommendation engines that can look across streaming services,” Venkateshwar wrote. “However, with every major recommendation engine having its own affiliated free ad supported streaming service (Comcast Flex-Peacock, Xumo, Vudu, Android TV — new Channels service, YouTube, Amazon Fire — Freevee, Roku — Roku Channel etc.), content on these services is likely to feature as prominently on TV screens as premium content for SVOD services.”

It’s All About Engagement

Ad revenue for FAST services is still low. According to Barclays, the top three services ad-revenue-wise are Pluto TV ($1.2 billion), Peacock ($1.16 billion) and Tubi ($653 million). And though upcoming AVOD products from Netflix and Disney Plus could further cut into that ad revenue pie, Venkateshwar wrote that it may all come down to overall engagement. 

Also: Is Engagement More Valuable Than Subscribers? 

“One of the most important drivers of engagement however may be the recommendation engine sitting outside these services,” the analyst wrote. “This in turn could turn streaming advertising workflow to a process not that dissimilar to search where the recommendation engine ultimately determines how GRPs are allocated across services, potentially in return for a share of ad revenues.” 

Walled Gardens and Open Spaces

Venkateshwar continued that this could lead to a split in the overall streaming ad ecosystem, similar to what has happened in the digital advertising arena. He estimated that today about 34% of time spent online is with so-called “walled gardens” like Facebook, Twitter, Snap and Pinterest, while the remainder is spent on the open Web, which also accounts for about 40% of ad revenue.

Over time, FAST could act more like the open Web, Venkateshwar wrote, while SVOD is more like a walled garden. 

“This process may result in advertising on these free streaming services being lower-priced fungible programmatic inventory, with CPMs being more comparable to services like YouTube and TikTok,” Venkateshwar wrote. 

According to the analyst, walled gardens are more likely to have CPMs that resemble television because they would have more control over ad delivery and measurement. But he added that across both segments the availability of inventory will most likely be determined by recommendation engines, which could result in lower ad margins. 

Still, Venkateshwar believes FAST services will become a larger category, albeit more fragmented than SVOD or AVOD spaces, making their success more dependent on aggregators. And though the same holds true for traditional SVOD and AVOD offerings like Netflix and Disney Plus, they have considerably more brand awareness as well as their own content franchises that should help drive engagement.  

“With Android TV launching its own free streaming service, Comcast already having Xumo/Vudu/Peacock, Amazon having Freevee and Roku having Roku Channel, we wouldn’t be surprised if independent free ad-supported streaming services like Pluto and Tubi, which have among the highest engagement today, end up declining in importance and consumption skews towards services owned by aggregators,” Venkateshwar wrote. “Therefore, we may see a significant skew in revenues across ad-supported streaming services over time, focused on a small set of services despite broader fragmentation in free service availability.” ■

More than a month after saying it would combine with WarnerMedia, creating a streaming and linear content giant called Warner Bros. Discovery with annual revenue of more than $43 billion, market reaction to Discovery Inc. has been tepid at best, with its stock dropping 26% from a high of $39.70 each on May 17 to $29.51 on June 23. At the same time, AT&T stock, which was up about 11% since the Feb. 25 plan to spin off DirecTV  -- has fallen 15% from a high of $33.81 on May 17 to $28.65 on June 23. 

Not exactly the stock performance dreams are made of. 

In a research note Thursday (June 24), Bernstein media analyst Todd Juenger deconstructed the merger, cited by countless screaming headlines as the creation of a “streaming powerhouse” that would combine the best content assets with the best management during the best time ever to be a content company. But according to Juenger, just like in the movies, the reality is a lot different. 

First, Juenger took issue with calling the merger the creation of a streaming powerhouse. That, he said, couldn’t be further from the truth because despite their streaming offerings -- Discovery Plus and HBO Max -- both companies “are almost entirely cable network companies.” And that, he said, isn’t any better either.

Juenger noted that all of the funds to support their streaming efforts come from traditional linear network affiliate fees and advertising revenue, both segments which are in sharp decline. And he added any unanticipated disruption to that side of the business -- accelerated cord cutting, a drop in ad revenue, a recession -- would put the entire streaming strategy at risk.

“Ironically, the more successful the streaming service becomes in the market – the more pressure is put on the linear networks,” Juenger wrote. “Which is the tyranny of the innovator's dilemma. (And also important to investor expectations about earnings and multiple. The more bullish one is on streaming, the more bearish one must be on legacy. And vice-versa). “

Adding to the potential injury is that both companies have networks with their own specific risks. Discovery’s networks, according to Juenger, have the highest operating margins in the industry (60%), but the risk is that any downturn in revenue would fall directly to the cash flow line at a very high rate.

WarnerMedia’s Turner networks like TNT and TBS, as general entertainment channels have “no specific content proposition, differentiation, or reason to exist in an increasingly on-demand world,” according to Juenger and rely on a handful of sports rights to keep distribution and pricing. Its news networks like CNN , he added, aren’t in control of their content cycle, adding to volatility. 

“With all these structural and specific risks to the linear networks, the new company will emerge with roughly 5x financial leverage (and a promise of using excess FCF to de-lever),” Juenger wrote. “We think this puts the company in a very difficult box to start from: promises to both invest in streaming and invest in de-levering. It also greatly amplifies risk to equity value. Any downturn in either EBITDA/FCF, or the valuation multiple of the stock, will fall entirely and sharply on the equity holders.” 

Adding to the pressure is the longer the merger takes to complete, the higher the risk of entropy at the operating companies, especially HBO Max, Juenger wrote, adding that HBO and Discovery were late to the streaming game as it is. 

By the time this deal closes, another year will have passed, and Netflix, Disney, Amazon, Apple, Paramount, et al are not going to stand still,” Juenger wrote. “Additionally, there is a risk of entropy during the next year as the deal works its way towards closing.”

And there is precedent for that. Juenger pointed to the Disney Fox merger. In months between the Dec. 14, 2017 announcement of the deal  to its close on March 20, 2019,  Fox lost much of its key management talent and according to Juenger,  those that remained were “in a state of paralysis.”

“All momentum had been lost, and Disney was left with a big operational turnaround project,” Juenger continued. “We think it is highly likely this same dynamic sets in, particularly at HBO.”

Over the past several years HBO has had multiple owners, multiple leaders, and multiple strategies, the analyst said. While returning to the hands of a media owner -- Discovery -- should put some smiles on employee faces, Juenger wrote they may not last for long. 

“[I[t's not fertile ground for stability when your company has been treated like a foster child being shopped from one temporary home to another over the past many years,” he wrote, adding that the combined entity’s plans to extract $3 billion in synergies from the union over time will add to the malaise. 

“The employees will see that $3 billion synergy number and wonder who is going to lose their jobs (and if they keep their job, how it will change),” Juenger wrote. ”One couldn't blame any of these employees for considering other employment options. The best talent will be ripe for the picking by other entertainment companies.”

Aside from the operational issues, how the combined company plans to price its streaming services will be a key to their success. Juenger has touched on this notion before, and with HBO Max priced at about $14.99 per month ($9.99 for an ad-supported version) and Discovery Plus priced at $6.99 per month for its ad-free version and $4.99 for an ad-supported offering, he doubts it will be a simple mash-up of prices. 

Neither Discovery or WarnerMedia has commented on potential pricing, but Juenger estimated it will likely be about $15 per month for a combined offering. 

Juenger was quick to admit that the market will forgive pretty much any operational shortfalls if the streaming service exceeds expectations, especially on the subscriber front. And so far he said history points to streaming products -- ranging from majors like Netflix and Disney Plus and smaller operations like CBS All Access and Starz to niche players like Shudder and Acorn -- outperforming predictions. 

“Of course, all this recent streaming adoption came in the middle of a stay-at-home pandemic,” Juenger wrote. “Which, we think, did accelerate the overall consumer adoption of streaming in a meaningful and lasting way. But we also expect some shakeout as the world settles back down.”

Earlier this month, researcher Parks Associates said that 46% of U.S. broadband homes subscribe to four or more streaming services, a number that Juenger predicts will be whittled down to three, with the services offering the most content value for the lowest prices the obvious winners. 

“The bullish view of Warner Bros Discovery is either that they will be among those top three global services, or that consumers on average will subscribe to more than three,” Juenger wrote, adding that HBO’s history of introducing compelling series every year, coupled with Discovery’s reality content and international presence could be enough to move the bull case forward. Or he wrote, the legacy pay TV service could last longer than expected, or subscribers could have a higher tolerance for price increases than originally perceived. 

Or better yet, Warner Bros. Discovery, as the new company is called, will become the streaming powerhouse its new owners believe it is destined to be. 

Streaming services decided to add more reality show content to their programming mix in the first quarter, according to a services to their mix, according to a study by Reelgood.

Reelgood said the increase in the number of reality TV shows on the streaming services it tracks nearly doubled, jumping by 92% from the fourth quarter.

Philo added the most reality shows for the second-consecutive quarter. Hulu added the second most in the quarter, moving up from fourth last quarter. Listed as popular reality series on Hulu were Shark Tank, Bad Girls Club, The Masked Singer, The Voice and Keeping Up with the Karadashians. Bravo’s Keeping Up with the Karadashians is ending after 14 years, but the family will be doing a new, original show for Hulu.

Amazon Prime was third, moving up from sixth. Netflix was fourth, down one slot. Top Netflix reality show including The Great British Baking Show, Jeopardy, Survivor, Selling Sunset and Queer Eye.

The study also found that Netflix continued to be the leader in adding original shows in the first quarter. It was followed by HBO Max and Amazon Prime, which were also second and third in the fourth quarter of 2020.

Disney Plus jumped up to the No. 4 position, jumping over Hulu and HBO. 

“As the battle for dominance intensifies in the streaming space, it’s become increasingly clear that unique and exclusive content is the key to success,” the Reelgood report said. “Newcomer Discovery Plus immediately surged to the ninth spot in the ranking for the most original TV show and episode adds while the big three are still Netflix, HBO Max and Amazon Prime Video.”

Orby TV was a bit of a contradiction in terms when it launched back in 2019: A video programmer that was offering a skinny bundle (a plus), over a satellite distribution platform (a minus) but economically priced at $40 per month (a plus) and aimed at a market that was becoming increasingly neglected by traditional TV (Baby Boomers who wanted a lean-back experience.) But former CEO Michael Thornton said the service, which was zeroing in on its break-even point after a little more than a year in business, was done in by a combination of industry misperceptions about the satellite TV business, broken promises from potential investors and the emergence of streaming video.

In an interview with B+C/Multichannel News, Thornton said Orby TV was in the final stages of landing a new benefactor before they pulled out at the last minute, dashing the satellite startup's chances of survival and leading to it filing for Chapter 11 bankruptcy in March.

Thornton, a former chief revenue officer at premium programmer Starz, founded Orby TV in 2018, with $25 million in backing from the General Electric Pension Trust. Armed with that money, Thornton said that Orby TV was poised to carve out a healthy niche, even if it was in a segment of the TV business that practically everyone else believed was dying a slow, painful death. 

But according to Thornton, the initial reaction to the service was extremely positive. 

“When we went out [to potential investors], I guess it was in late 2017, we got a ton of traction,” Thornton said. “The story, even though it was somewhat contrarian, people understood it, particularly the idea of a centralized and very un-capital intensive [company]. It was a really easy story to tell [and] it didn’t take a lot of subscribers to generate a fair amount of cash.” 

Thornton said when Orby TV shut down, it had about 30,000 subscribers, nearly half-way to its break even point (where it would start turning a profit) of 65,000 customers.  

Simple Pitch

Orby TV’s pitch was focused on its prepaid, pay-as-you-go offerings, with no contracts to sign and no credit checks to slog through. The company believed that it could appeal to the 30 million existing prepaid wireless customers, who are traditionally focused on keeping costs low and don’t particularly cotton to the hidden fees and charges that pop up in many traditional video packages. With Orby TV there were no surprises in the monthly bill -- that $40 included all taxes and fees.   

But though the service launched with much optimism, there were already two strikes against it: the precipitous decline of satellite TV and the chasm between what consumers say they want and what they are willing to pay for.

First, the satellite business. 

Satellite Decline

Subscriber numbers for the satellite business have never been worse than they are today, but they weren’t much better in 2019. DirecTV and Dish Network had been steadily losing subscribers for years -- DirecTV had peaked at about 21 million customers in 2017, around two years after it was purchased by AT&T, but has lost about 8 million subscribers in just three years, according to Statista. Dish Network, which had about 11 million satellite TV customers in 2017, had shrunk to about 8 million subscribers by the time Orby TV launched. 

Orby TV launched amid that backdrop, which to the untrained investor would look like a risky neighborhood. Even trained investors said that in retrospect, launching a brand-new satellite TV service in that climate would have raised many questions.

FBN Securities media analyst Robert Routh, who has followed the satellite business for years but did not cover privately-held Orby TV, said that the primary rule for any TV service is that it brings something new to the overall business. And though Orby TV was trying to differentiate itself through its low-priced prepaid options, he said to most consumers, that probably wouldn’t be enough. 

“When it comes to distribution, unless you're bringing to the table something that is a real advantage to the consumer that the other’s don’t have -- and I don’t know what that could be --  at a better price, why bother?” Routh said. “It’s like putting up a gas station across the street from other gas stations.” 

Thornton said he realized that satellite TV service was in decline, but he and his investors believed that was tied more to the inefficiencies and high prices of the larger providers. Plus, Orby TV only needed to convince less than 100,000 prepaid wireless customers to sign on to the video service to make money. With 30 million prepaid wireless customers already out there, that seemed like a good gamble. 

“The difference with us, we were looking at tens of thousands of customers for a profitable business and a really profitable business once it hits that break-even,” Thornton said. “So, it doesn't take a [lot of] time to move forward. But you’re right, satellite is not the future in terms of in-home television viewing, And that just became a really really hard thing to overcome.” 

Blinders Off

Thornton didn’t enter into the satellite venture naively. A 22-year veteran of the TV business, he had spent eight years at premium channel Starz, was an EVP at Disney/ABC Domestic Television and even served as SVP of programming acquisitions at DirecTV in the late 1990s. So he knew how the pay TV business worked. And even with the satellite business in decline, Thornton was convinced that there was room for a focused, cost-efficient, niche player that offered a strong programming slate for a low price.

“We really felt that the traditional market was just too expensive and there had to be an opportunity for people to access television but not at these exorbitant prices that just keep going up and up,” Thornton said of the decision to start up the business. “The idea was, even with the streaming that hit the market, there were still a ton of people, particularly in the boomer generation, that just wanted to turn on their TV and watch it and get a skinny bundle with a lot of value that wasn’t exorbitantly priced, wasn’t in that $125 price range.” 

And the prevailing wisdom seemed to back him up. For years prior, analysts, distributors and some programmers touted the need for “skinny bundles,” thinner packages of programming, usually minus sports networks, that could be offered at lower prices to consumers. With the traditional TV bundle costing north of $100 per month, several distributors attempted to offer up smaller, cheaper bundles that at first brought some pretty stiff resistance from programmers. As time went on, and pay TV subscriber rolls have dwindled across the board, that resistance has waned somewhat. 

The Trouble With Skinny Bundles

And that brings us to the second strike against the satellite startup -- rights issues and payment demands have hamstrung MVPDs in trying to set up skinnier packages for years. While that is beginning to ease a bit, consumers have managed to talk a good game when it comes to desiring smaller video packages, but have been reluctant to open their wallets.

A combination of not being able to get the channels they want in a skinny package, the hassle of switching providers and the emergence of streaming services like Netflix, Amazon Prime Video and Hulu have effectively squashed the skinny bundle. The advent of direct-to-consumer offerings from established programmers like Disney (Disney Plus), WarnerMedia (HBO Max); ViacomCBS (Paramount Plus) and Discovery (Discovery Plus) have made it even more complicated. 

Secondly, for pay TV stalwarts like cable, telco and satellite TV companies, skinny bundles haven’t really worked. Mainly because they’re not that skinny.

Obligations to keep pricey sports channels like ESPN, FS1 and regional sports networks on the most popular tier have tied many a cable, telco and satellite TV operator’s hands. When Verizon’s Fios first introduced its Custom TV skinny bundle in 2015, it was met with outrage by programmers, who said the package violated their agreements. One year later, Verizon amended the Custom TV package, adding ESPN and other sports channels to a Sports and More offering for the same price.  Today, Verizon has “Mix and Match” which allows customers to “test drive” its entire channel lineup, formulating a package of most-watched channels after two months.  

But Then Again, There’s Philo

At the same time, Philo TV, launched in 2018, around the same time as Orby TV, has managed to carve out a niche in low-cost, non-sports programming. Philo first offered 35 channels for $16 per month (an add-on package of nine channels was also available for an additional $4 per month). Now the company offers 63 channels (including AMC, Comedy Central and Discovery Channel) for $20 per month and as of November 2020 had about 800,000 subscribers. 

Thornton pointed to Philo as proof that the skinny bundle is still desirable.

“They [Philo TV] have many, many more subs that we had with a smaller bundle than we had,” Thornton said. “The skinny bundle is something that people want.”

He also dismissed the argument that what consumers really want is ala carte programming where they can mix and match their favorite channels for lower prices. While that’s the ideal, it’s also a hassle to sort through the hundreds of possible options such a future could bring. 

“Ultimately everybody tries to get to more of an ala carte place, but in reality people don't want ala carte, they want to be told, ‘Here are the different packages,’” Thornton said. “They want to be pointed to the best value, they want the ability to think that they can ala carte as well. It’s a difficult balance, and a lot of it is based upon history.”

Routh added that adding to the pressure is that some people, especially in really rural areas, don’t want TV at all. And it doesn’t matter how low the price for the service is.

"You can’t change the nature, the behavior of those people,” Routh said. “There’s nothing wrong with that, but out of that universe he was targeting, there was [probably] a certain percentage that even for nothing they wouldn’t take it.” 

Opening Optimism

When it launched in 2019, Orby TV offered content from top programmers like ViacomCBS, WarnerMedia, AMC Networks and Discovery. From the start, Orby TV offered 44 channels for $40 per month, with an expanded package that included digital networks like MTV Classic, DIY and others for $50 per month. Orby TV was able to keep its rates low because it didn’t offer sports channels like ESPN and FS1, and broadcast channels. Customers could access their local broadcast networks via a digital antenna over-the-air. 

Also Read: Brave New TV World 

With lower cost programming -- no USA Network, Fox News Channel or Disney Channel --  and no upfront equipment costs -- customers had to buy their own dishes and set-tops at Best Buy, Target or other retailers -- Orby TV had low overhead. Thornton said the company at its height only had 17 full-time employees. 

 "The cost basis was very low," Thornton said.   

Financing Troubles 

Looking back, Thornton said he wished he hadn’t relied on one financial backer. And even with low overhead, the company burned through most of that $25 million in about 16 months -- bankruptcy documents said the company had $500,000 in cash and $52 million in liabilities, mostly to programmers. 

According to court documents, GE Pension Trust is owed about $11.6 million, while programmers like Viacom ($16.4 million), AMC Networks ($10.4 million), Turner Broadcasting System ($4 million) round out the list of unsecured creditors. 

When it became clear that the GE Pension Trust wasn’t going to put any more money in the company, Thornton said that he had lined up a group of investors -- including programmers who had networks carried by the service -- to pump in needed capital. But that deal collapsed literally inches away from the finish line. 

“We lined them up, hopefully to close in the middle of 2020, but like everything else in the pandemic, things were slow to get going,” Thornton said. “That close kept getting pushed off, pushed off until the fall. Then at the eleventh hour, literally the week we were set to close with the programmers, one programmer backed out. With that programmer backing out, all the programmers said, ‘Well, maybe we will take a step back and rethink this.’ The irony at least to me was the numbers had held really really well during the pandemic -- a lot of people were watching TV, were watching their budgets, and we continued to grow.” 

Thornton declined to identify the investors, but said the specter of streaming TV dominated almost every conversation he had with potential backers. At one point, because of its pre-pay option that allowed customers to “pay-as-you-go,” for service, Thornton met prepaid wireless carriers like Tracfone and its then-parent American Movil about potential partnerships.

“We had some very interesting discussions with the Tracfone guys and even American Movil out of Mexico City,” Thornton said. “But unbeknownst to us, at the same time we were talking to them, they were talking about selling as well.” 

Tracfone said in September that it had agreed to be purchased by Verizon. 

Hooking up with a prepaid phone carrier would have been a smart move, Routh said.

“What he was doing, it did, on a certain level did make sense, and if he could have gotten it bundled with a prepaid phone plan, then it probably would have had a much greater chance of survival,” Routh said. “Since he wasn’t able to, I’m sure he was paying the programmers multiples of what Comcast pays. And with the upfront costs and the leverage, he couldn’t grow subs fast enough. It was ballsy to even attempt, you have to give him credit for that.” 

Thornton added that there was no lack of trying. In the pitch to phone providers,  he compared Orby TV to another alternative video carrier -- Layer 3 -- that was eventually swallowed up by T-Mobile in 2018 for $325 million.  T-Mobile shuttered that service, along with its TVision video offering, about two years later.  

Orby TV was pitched as a way for prepaid carriers to break into the video market at a lower cost than Layer 3, he said. At the time Layer 3 (which raised about $100 million in several rounds of financing) was marketing a high-end, “fat bundle” package, targeted at customers that wanted lots of video, white-glove customer service and weren’t afraid to pay top dollar for it. Layer 3 video packages started at $75 per month. 

“In some of the early pitches, I would say if you’re familiar with Layer 3, we are exactly at the other end of the spectrum,” Thornton said. 

Streaming Emerges

Also at that time, several programmers were eyeing streaming options, but most were still selling content to SVOD companies like Netflix and Amazon Prime. That all changed when The Walt Disney Co. launched its Disney Plus streaming service in 2019. Disney set the tone with a $6.99 monthly price point, and was followed by offerings from WarnerMedia (HBO Max), AMC Networks (AMC Plus), NBCUniversal (Peacock), ViacomCBS (Paramount Plus) and Discovery Inc. (Discovery Plus). 

“The surprise to me was the amount of focus solely on streaming, it's the bright shiny object that everyone seems to be chasing,” Thornton said. “People talk about that there is a lot of money out there that needs to be invested, and there is, but people are singularly focused on streaming.”

He added that the market responds quickly and favorably to seemingly minuscule streaming moves, ignoring the fact that it will take a tremendous amount of growth before that segment is profitable. Meanwhile, other parts of the video business are being ignored. 

“People are wildly, wildly focused on that one [streaming] aspect,” Thornton said. “Wherein last I checked it’s still a very profitable business to be in the broadcast business. Local broadcast stations are still doing insanely well. Do they need to grow and do they need to adapt? Absolutely. But it’s a great business right now.” 

Still, there’s no mistaking that streaming is the future of the business. And programmers are making moves to lay out the infrastructure for that future now. In the meantime, there are some analysts that predict that some satellite players will be whittled down to nothing in as soon as five years. 

Thornton said that when it became apparent that the bottom was falling out of his financing deal, he tried hard to save the company, talking with Dish Network founder and chairman Charlie Ergen about a possible partnership. In the meantime, speculation was high that the company was in trouble, especially after its website suddenly went dark. 

“I went to Charlie and we talked about even doing an MVNO relationship,” Thornton said. “Using his capacity, using his satellites and his equipment and just keeping  the Orby name and having to transfer everybody over. He [Ergen] sees the value in these customers because it’s probably not unlike the customer he originally went after. In the end, while we talked about it and thought about it, the expense of pushing everybody over he felt was probably more than it was worth.”

After it filed for bankruptcy in March, Orby TV urged customers via its website to switch to Dish Network. 

Lessons Learned

Today, Thornton isn’t holding out much hope for an Orby TV rebirth.

“I think if it was going to be able to restart, it probably would have by now,” he said. “The longer the customers are without programming, the harder it is to bring them back. If it got down to right before pre-filing that I thought there was a chance for somebody to come in and swoop it up, I actually thought about trying to raise money myself and swoop it up, but it just became more trouble than we thought would be worthwhile.”

But he believes there is a lesson to be learned from the demise of the business.

“You would think that the programmers would look at that and say we’ve got to figure this out,” Thornton said. “When a cable operator, no matter how small, says it’s worth my while to give you a Firestick or an Apple TV or a Chromecast because I can't give you programming in a way that I can make money, something’s wrong.” 

FuboTV said it intends to list its stock on the New York Stock Exchange and has launched a public offering of 15 million common shares.

The offering price is expected to be $11 per share.

In August  fuboTV, which merged with Facebank Group in April, reported losing $100 million in the second quarter. Revenue rose 53% to $44.2 million as users of its virtual pay-TV service increased by 47% to 286,000.

Evercore ISI is acting as the lead book-running manager for the proposed offering. BMO Capital Markets Corp., Needham & Company and Oppenheimer & Co. are acting as additional joint bookrunners for the proposed offering. Roth Capital Partners and Wedbush Securities are acting as co-managers for the proposed offering.

Cinedigm said it signed a multi-year deal to stream children’s content in the U.S. from Corus Entertainment’s Nelvana.

52 hours of popular Nelvana shows including Babar, Braceface, Pippi Longstocking, Rescue Heroes and Maggie and the Ferocious Beast will appear on Cinedigm’s Dove Channel and CONtv.

“We are delighted to expand our partnership with Nelvana by adding beloved series which have entertained and engaged multiple generations over the years to Cinedigm’s Digital Networks,” said Yolanda Macias, executive VP of acquisitions. “Through our broad reaching Dove and CONtv Channels, we are excited to broaden Nelvana’s distribution of these well-known programs and help bring them to both long-time fans and new audiences alike.”

Financial terms were not disclosed. 

“As viewing habits continue to shift, we recognize the importance of making our content available on multiple digital platforms,” said Mellany Masterson, head of Nelvana Enterprises. “Our continued partnership with Cinedigm and their streaming platforms allows us to further expand our reach so that both kids and their families can enjoy many of our beloved titles from our award-winning library.” 

FuboTV said it expects higher subscriber, revenue growth and ad sales in the third quarter than previously forecast, driven by the start of the NFL season.

The company, which lost $100 million in the second quarter, did not  forecast net earnings. But it did say that its shares were approved for listing on the New York Stock Exchange, conditioned successfully pricing its stock offering. 

The company also said it added $52 million in equity funding from institutional and private investors.

“We believe consumers will, particularly in this current economic climate, continue to choose streaming over traditional pay television because of this more personalized, premium viewing experience that is also less expensive,” said CEO David Gandler in a letter to shareholders. “Furthermore, we believe fuboTV’s sports package is unparalleled in the marketplace.”

Fubo said it expected third quarter paid subscribers to reach 370,000 to 380,000, up 28%. Previously it had forecast that it would have 340,000 to 350,000 subscribers, up 20%.

Revenue is forecast to rise to $50 million to $54 million, an increase of between 27% and 38% from a year ago. In addition to growth from subscriber fees, Fubo said it expected ad sales to double from a year ago, with advertising revenue per unit between $6 and $7.

FuboTV expects its growth to continue for the rest of the year, with fourth quarter revenue of $68 million to $75 million, a 53% to 68% increase. It forecasts having 410,000 to 420,000 subscribers, up 30% to 33%.

For all of 2020, the company expects revenues to be up 50% to between $220 million and $231 million. For 2021, it sees revenue jumping 82% to $400 million to $420 million.

“The current quarter has been very strong for fuboTV with double digit revenue and subscription growth year-over-year as well as improvement in retention - all achieved during the ongoing pandemic,” said CEO David Gandler in a letter to shareholders. 

“With the leading live sports package in the market, we are encouraged that the major sports leagues have found ways to navigate the pandemic. The NFL has a great example with Major League Baseball on how to handle COVID-19, and we’re excited for the season,” he said. “The start of the NFL season and the expectation of a heavy fall sports calendar is driving engagement, ad revenue and higher CPMs, giving us additional confidence to forecast a strong third quarter for fuboTV. Looking ahead, we are focused on driving revenue growth by increasing subscription and ad sales and improving engagement.”

FuboTV merged with FaceBank Group in April and has been doing business as fuboTV.

Flash back to the not so distant past when not a single app or video came up following an internet search on LGBTQ and a light bulb idea came up for Damian Pelliccione. He wanted to create a streaming network featuring queer content and championing diversity and inclusion in media and the entertainment. 

Founded in 2016 by Pelliccione, Alia J. Daniels, Christopher Rodriguez, Wadooah Wali and LaShawn McGhee, this mixture behind the scenes at Revry (Revry.tv), according to Pelliccione, is “50 percent women of color, 75 percent people of color, and 75 percent LGBTQ.” 

“We are also immigrant, army veteran, people of color, Latinx, African American female and LBTQ founded,” he noted. “And we have a mission, a purpose and a belief that representation in media can and does save lives. Representation starts from leadership, and that’s why we formed the company and the structure the way it is.”

The Revry.tv website features a curated selection of TV series, films, podcasts, news, music, and videos under a free (with commercials) or paid subscription model. It also offers original content including the series Before I Got Famous, America in Transition, BIFL and Barbelle. And the content is available online and via services including iOS, Apple TV, Amazon Fire, Android TV, Roku, and TiVo. 

We spoke to Pelliccione, who will be among the panelists on "The Niche Effect" during the Streaming TV Summit on Oct. 1, about Revry today, what the future holds, and how the platform works to spark positive and necessary change in the ongoing quest for diversity in media.

Fall TV 2020: Comscore CEO Bill Livek on Impressions-Based Future

The Streaming TV Summit, which runs from Sept. 29 to Oct. 2, is part of Future plc's virtual Fall TV 2020 event.

Q: What are you looking forward to most out of this conversation? Where are you expecting the conversation to go, and what would you hope audiences will glean from it? 

Damian Pelliccione: We define ourselves as not just a media company, but as an impact-driven startup. We help shape culture and help shape change, specifically social change in the world. Our product does something for a group of people that is either under-represented, under-heard, or does not have a place at the “table.” Yet, the available data points to a segment that is extremely valuable. The disposable income of the LGBTQ community in the United States is over $965 billion a year and $5 trillion globally. That is not a small market, and there is no TV network or streaming service that is fully targeting those dollars, nor anyone who is working with advertisers, specifically on the video level that we do. Our mission is to spark change and capitalize on the value we bring.

Q: Is your model mainly subscription based like some of the primary streamers (Netflix, Amazon Prime and Hulu, for example)?

D.P.: I don’t think subscription is the future. I think we are in a period of subscription fatigue and we are seeing these majors cannibalizing each other trying to fight for that subscription dollar. Unless you have a very convincing value proposition as to why I am going to subscribe, I don’t believe that content should be behind a paywall. We started as a subscription model, but we have a “tribrid” approach: live free television, free ad-supported TV, and fast channels first in many different environments in as many different formats as we can garner. Then we have AVOD and we offer [a] subscription, which is for the person who wants to support the community in an underserved market and wants to have access to all the content all of the time commercial free.

At the end of the day, we now control the largest amount of video ad inventory for the LGBTQ segment in the world. We sell it direct, we sell it programmatically, and we even give it away to MGOs because we created this platform to impact change in our community and shape Queer culture. We understand that television is still driven by advertising and consumer purchasing. It is not subscription.

Q: How do you find your niche in the marketplace opposite these major streaming services?

D.P: I believe that authenticity drives innovation and it also drives marketplaces. We describe ourselves as “#radically inclusive and #unapologetically queer.” We are not the first at doing this, but we think we are the best at doing this, and that is what sets us apart. We all have personal insights into this community.

Q: How do you come up with the content for Revry?

D.P.: We are a startup, so we license a lot of the content of course. But we scoured everywhere: YouTube, film festivals, relationships and referrals, markets, distributors, studios…you name it. We are getting content from a multitude of sources. And we are increasing our original production.

When we did our research and we looked at the LGBTQ libraries in the mainstream, such as Amazon, Hulu and Netflix, we found the same titles…Brokeback Mountain, Boys Don’t Cry, The Golden Girls, etc. The things that are the obvious legacy titles are what we try to shy away from, which we think really creates a different value proposition for the consumer to want to engage with our apps and our channel. 

Q: How has COVID-19 impacted your business model?

D.P.: I am sure you are hearing across the board how COVID has accelerated usage, subscription and otherwise, but more on the free side. Anyone who is in the business of entertainment post-COVID is thriving, at least in terms of increased audience interest. Historically, the first thing people stop spending on during any crisis is going out for entertainment so they spend more time at home in front of their television. I am not happy about the pandemic and the impact it has had on the world; none of us are. But I do find it ironic that the thesis of streaming and all the traditional models are benefiting from it.

Q: Can you talk about what initiatives lie ahead?

D.P.: We are coming up [with] five new channels before the end of the year, all different interests or genre based that are within our community. Here we are shaping not just a single channel like Logo is, but proving the viability [of] why there might be a marketplace for maybe a LGBTQ news network or music network, or so many other things.

I think the next big phase of our business is going to happen in the next couple of years where you will see us pushing more original content, co-productions with other digital studios and networks. Five years later and we have really only just begun.

Launched in January 2019, STIRR, owned by Sinclair Broadcast Group, operates under the notion that broadcasters play a key role in delivering content and services to consumers in enabling advertisers to have direct relationships. Unlike other OTT offerings, which are national brands and available everywhere, a primary focus at STIRR is on local programming -- news, sports and lifestyle in particular. 

“There are genres of programming that are all local that have never been exploited,” said Adam Ware, VP and general manager, National Networks and Platforms at Sinclair Broadcast Group. “Viewers, from cord-cutters to cord-nevers to people that still have cable, tend to watch primary streamers like Netflix, Amazon Prime Video and Hulu for certain shows. But the disconnect is the absence of local programming and all the things that would drive local interest.” 

Fall TV 2020: Keynote Targets Connected TV and Brand Safety

STIRR is available on platforms including Roku, Fire TV, tvOS, iOS, Android and the web. An offshoot channel called STIRR CITY streams a 24/7 program line-up based on where the viewer lives. And, effective via STIRR this fall, will be the streaming availability of syndicated mainstay entries like Judge Judy, Jeopardy! and Wheel of Fortune.

We spoke to Adam Ware about the merits of the traditional TV platform and how COVID-19 has permanently impacted our business ahead of the Sept. 29 to Oct. 2 Streaming TV Summit, part of Future's Fall TV 2020.

Q. What are you looking forward to most out of this conversation? Where are you expecting the conversation to go, and what would you hope audiences will glean from it? 

Adam Ware: From where we are targeted, traditional TV is in the best position to take advantage of streaming opportunities. The first thing people forget when they think about streaming is that this is TV. When they think about streaming, mobile and desktop come to mind, and that might be the case for certain television viewing. That was definitely the case for streaming to begin with, but for the last five or so years streaming has become over-the-top. And over-the-top is a lean back experience. That is the space that has gotten the most traction, which was supersized particularly with COVID-19 with everybody at home. 

Q. How has COVID-19 impacted your business model?

A.W.: The pandemic accelerated two elements of our business model. The first was expanding out to more local programming, whether it is more STIRR CITY markets with local news or actually more channels (like 20/20 Live or COVID-19 News). The second was how it caused our usage to catapult two years ahead of where we expected it to be. That said, we are in year four of our business plan instead of year two.

Q. Do you think the pandemic has permanently impacted the media business?

A.W.: There have been four instances, fundamental moments and events that happened, that I can remember a shift in the media business where it never has gone back to what it was before. COVID is now one of them. 

The first was the writer’s strike of 1988, which delayed the season and actually benefited a then new network like Fox because people had not really seen a show like Married with Children.  Their repeats were a hot commodity and all of a sudden there was a fourth network. That changed the landscape forever.

The second one was 9/11, which was a similar situation where the shows that were going to premiere in September were delayed. Once people became overwhelmed by all the news coverage, they began to sample the cable networks that were now doing original shows. Cable networks like FX, USA and TNT became a place you would go to as an alternative.

The third was the next writer’s strike, which caused a shift to reality television and more of an emphasis on the news divisions care of their newsmagazines. And the fourth is now COVID, where you have all these people at home watching television. The pandemic has had an impact on viewing, which basically supercharged the alternative platforms.  

Fall TV 2020: Comscore CEO Bill Livek on Impressions-Based Future

Q. The prediction by many that the traditional linear broadcast model will become extinct continues. What do you link the future holds for the Big 4 broadcasters?

A.W.: People have been talking about the “death” of ABC, CBS, NBC and Fox for years. But those companies are even more important to the overall ecosystem than ever before, which really started when Disney bought Fox. All of a sudden you had a rush to have a broadcast network at the front, or the equivalent of a broadcast network (meaning a high reach cable network). Then you had big giant studios, direct-to-consumer businesses, strong network brands, etc. I do not see broadcasters becoming less relevant in that world.

Broadcast, additionally, is where people still watch the majority of their television. No matter how they are getting it, whether they are watching from their cable network or cable system or satellite or over-the-air, they are watching broadcast TV. In fact, when you see someone like Netflix or YouTube TV or Prime Video, whoever, advertising on television to get subscribers, they are advertising on a broadcast network. In other words, they are “fishing where the fish are.”

Q. How are you transforming the medium formerly known as “television”?

A.W.: I think the first way is really putting “muscle” back in local TV. When broadcast TV first started, there was a lot of locally produced programming and many of those shows ended up becoming nationally syndicated shows. Over time, they got away from that as groups started consolidating and people started looking at national solutions. What STIRR is doing is discovering those roots again by bringing a tremendous amount of programming that is produced locally back to television viewers.

Secondly, no one really looks at local broadcasters as being innovators in the streaming business and that is a role we are playing and will continue to do so.

For more about Fall TV 2020 -- with the virtual Advanced Advertising Summit, Hispanic Television Summit, Streaming TV Summit and Audience Measurement Summit coming Sept. 8 to Oct. 2 -- visit falltvevents.com.

In another sign of the big changes taking place in the television business, 50% of consumers said the first place they go when they want to watch TV is a streaming service, according to a new study from Hub Entertainment Research.

A year ago in a similar study, 47% of consumers said they first went to either a streaming on-demand service like Netflix, a free service like Pluto TV or a virtual MVPD like YouTube TV.  

Pay TV was the default service for 42% of consumers surveyed, down from 47% a year ago.

The pull of on demand streaming is so strong that 23% of cited Netflix as their first choice versus 30% who said live TV via a traditional pay TV service.

The trend is especially strong among young consumers, with just 14% of those in the 18-34 demographic calling pay TV their first choice, down from 21% a year ago.

But Hub noted that pay TV won’t die easy. When consumers were asked if they had to drop all of their TV services but one, the top answer with 35% was live TV from a traditional pay TV distributors, topping Netflix with 32%. But among people who picked Netflix as their first stop, 61% said they’d keep Netflix. Among those who called live TV their default, 56% said that would be the one to keep if they could only keep one.

According to the Hub survey the top reason for selecting a service as their first choice is because they have the viewers favorite show. They also want it to make it simple to find something to watch and the ability to watch live shows.

“We’ve seen a significant boost in streaming TV service subscriptions since the start of the pandemic in March of this year,” said Peter Fondulas, principal at Hub and co-author of the study. “But perhaps more significant than the simple increase in online subscriptions is the profound shift in consumers’ viewing behaviors generally. Instead of reaching first for the cable remote when it comes time to watch TV, more and more consumers are defining TV viewing, first and foremost, as viewing on streaming services. Whether that shift persists once the pandemic crisis has passed is, of course, the billion-dollar question.”

Hub’s Decoding the Default study was conducted in August  among 1,600 U.S.  consumers with broadband, age 16-74, who watch at least one hour of TV per week.

There's more evidence that the TV world is turning to streaming from pay TV. 

Streaming grew to more than 25% of total TV minutes viewed in the second quarter, according to Nielsen’s latest Total Audience Report.

In Nielsen’s last report, streaming represented 19% of TV usage in the fourth quarter.

At the same time, live TV consumption dropped to 3 hours and 43 minutes per day in the first quarter, down from 3:53 a year ago and 4:10 two years ago. 

Nielsen said that the share of TV households with a pay TV subscription fell to 76.3% from 78.1% a year ago. The share of people with SVOD subscriptions rose to 74% from 70% and the 77% of people owned internet enabled TV-connected devices, up from 72%.

“COVID-19 has catapulted streaming to become the present and future of content creation. Today, it accounts for 25% of our collective time spent with the television among streaming capable homes. Streaming has also taken hold among consumers 55 and older, often a technological sign of ubiquity and resolve,” said Peter Katsingris, senior VP, audience insights at Nielsen.

According to the new Total Audience Report, Americans watched an average of 142.5 billion weekly streaming minutes in the second quarter, compared to 81.7 million hours in the second quarter of 2019.

Netflix has the largest share of streaming viewing at 34%. Netflix is followed by YouTube at 20%, Hulu at 11%, Amazon at 8%, Disney Plus at 4% and “other” with 23%. In the fourth quarter, Netflix had a 41% share, followed by YouTube at 21% Hulu at 12% and Amazon at 8%. Disney Plus had just launched.

Nielsen found that viewers of all ages are streaming. Consumers 55 and up--the heaviest TV viewers--now account for 26% of all streaming, up from 19% a year ago.

The study also found that 25% of those surveyed have increased the number of video services they subscribe to.

While consumption of live TV and time shifted TV was down, use of digital devices grew. People spent 3:46 per day using apps or the web of their smartphones, up from 3:01 last year. At the same time use of the internet via a connected device rose to 48 minutes from 35 minutes a year ago. Usage of the internet on a computer and on a tablet were also up.

Live and time shifted TV’s share of media time fell to 35% from 39%, while TV connected devices rose to 9% from 8%. The big gainer was smartphones, which rose to a 30% share from 26%.

Looking at video, live plus time shifted TV fell to 4 hours and 16 minutes from 4:27 in the first quarter a year ago, while usage of TV-connected devices rose to 1:06 from 54 minutes. Overall the average amount of time spent watching video rose 10 minutes to 5 hours and 56 minutes.

The percentage of the 251 million American homes with traditional cable fell to 68.6% in July from 72.7% a year ago. vMPVDs’ share rose to 7.7% from 5.4%. Over the air households were unchanged at 13.4% and broadband-only homes rose to 10.3% from 8.6%.

After falling from peak levels in March when people started staying home to slow the spread of the coronavirus, time spent with over-the-top video bounced back in July, according to Adobe.

While video starts are still down 2% (following an 11% dip in June), time spent is back up to March levels, rising 28%.

Adobe said the drop in video start indicates that after months of searching for something to watch, there is less content surfing and fewer viewers who are new to streaming.

Video completion trends are better. Completion rates began a steady decline in early 2019, as consumers were flush with a growing array of services and original content. By the start of the year, completion rates were still down. Adobe said rates began to go up in April and that has continued into July, when they were up 11% from a year ago.

“In a single sitting, 63% of consumers say that they always/often finish a piece of video content from start to finish," Adobe said. 

Since the COVID-19 shelter-in-place orders, mobile use has been growing for shopping applications, but video consumption of non user generated content is not growing on mobile. In fact, in July use of mobile was down 10% and usage on desktops was down 18% while OTT video rose 116%.

Looking at video time spent paints a similar story. OTT is the primary growth driver, with significant peaks in months like April. 

Time spent on mobile has been in decline for the last three months (May-July). And desktop has not been a growth driver either. 

Consumers find they have too many streaming options, and it is becoming overwhelming, Adobe found. 

In a survey of over 1,000 people: 40% felt there were too many apps and services to stream video, and that it was difficult to manage (29% did not agree; 31% were neutral). 60% reported having 1 to 3 services, while 35% had between 4 to 7. Around 6% had more than 8. 

Since March, 54% reported not purchasing any new subscriptions or services.

Fox’s Fox News Media unit said it is launching Fox News International, a subscription streaming service on Aug. 20.

The service will cost $6.99 a month and debut in Mexico. It will roll out in Spain, Germany and the United Kingdom on Sept. 17 and reach 20 countries by year end, the company said.

Fox News International will feature programs from Fox News Channel and Fox Business Network.

“We are excited to debut Fox News International, enabling our devoted audience overseas access to their trusted source for news and insightful analysis,” said Suzanne Scott, CEO of Fox News Media. “With a catalog of more than 20 signature programs on-demand and live streams of our linear networks, this new digital streaming service will ensure our viewers around the world never miss out on the latest from America’s leading news channel.”

ViacomCBS reported lower second-quarter profits as the COVID-19 pandemic reduced ad revenue.

Net earnings fell to $481 million, or 78 cents a share, from $977 million, or $1.57 a share, a year ago.

Revenue fell 12% to $6.275 billion.

Advertising revenue fell 27% because of the economic effects of COVID-19 and the cancellation of the NCAA Men’s Basketball Tournament and several golf events. Domestic ad revenue was down 24% to $1.73 billion.

Affiliate revenue rose 2% to $2.194 million. Domestic affiliate revenue was up 2% to $2.034 billion.

Domestic streaming and digital video revenue was up 25% to $489 million, with 52% growth in streaming subscription revenue and increases at Pluto TV, where domestic monthly active users were up 61% to 26.5 million. Pluto TV expects to have 30 million monthly active users by year end. The company said it had 16.2 million domestic streaming subscribers to its pay services and forecast that it would have 18 million by the end of the year.

The company is gearing up to transform CBS All Access into a “Super Service,” with entertainment, news and sports content.

ViacomCBS’s TV Entertainment unit reported a 36% drop in adjusted operating income before depreciation and amortization. Revenue was down 22% to $2.287 billion, with ad revenue down 22% to $2.287 billion and affiliate revenue up 22% to $751 million.

Adjusted OIBDA was up 30% to $1.285 billion at the company’s cable networks, with revenue up 2% to $3.232 billion. Ad revenue was down 26% to $3.232 billion and affiliate revenue down 6% to $1.443 billion. Content licensing rose 175% to $797 million as the company sold South Park to AT&T’s HBO Max.

Filmed entertainment OIBDA was up 22% to $116 million despite a 26% drop in revenue to $647 million.

The company said it expects to have $300 million in cost synergies resulting from the combination of Viacom and CBS, up from $250 million forecast earlier. Over three years, the cost savings should reach a run rate of $800 million, up from $750 million.

Despite the impact of COVID-19 on revenue in the quarter, we’re successfully managing through the effects of the pandemic, reaffirming the strength of our combined operations,” said CEO Bob Bakish. “Our results underscored our strong progress delivering on our value-creation initiatives, including integration cost synergies, expanded and new distribution agreements, as well as the rapid acceleration of our streaming business, where we achieved record users and revenue in free and pay while building toward the relaunch of our diversified super service.”

In the world of linear TV, dayparting is a core parameter of any media-buy. Unlike digital, however, networks will not sell their inventory for airing at a specific time during the day (e.g. “run an ad at 8 p.m.”); instead, they will offer broad rotations, such as “daytime TV” (e.g. 12-5 p.m.) or “prime time TV” (e.g. 7-11 p.m.). Keeping rotations broad is a very clever way to bundle great air times (using the prime time example above: 7 p.m.) with not-so-great times (e.g. 10:55 p.m., also during prime time, but when most people have gone to bed already), keeping the average high.  

Dayparting, or rotations, is big business. Pricing between various rotations on a network can be 10 times different. An example from a national news network is provided below:

Some networks will even overlap rotations in an attempt to create further fog around the price. They do their best to make advertisers treat all impressions as premium (when perhaps, they are not).   

Streaming publishers, on the other hand, don’t even have to try. They typically charge the same (high) rate or CPM for impressions, regardless of the time of day during which they are delivered. The rationale for this is the fact that most streaming TV is on-demand, and viewers consciously tune-in. Phrased differently, someone watching streaming TV at 2 a.m. is (allegedly) as valuable as someone watching during prime time.

Not so fast. Response rates on streaming impressions do in fact differ significantly by time of day. As shown in the chart below, impressions delivered during “less favorable” dayparts (like mid-day or overnight) do not necessarily drive the same response as those that land during prime time. And yet, the impressions were sold at the same “prime time CPM.”

This is not to say that there are certain times of day that are inherently better or worse on their own. Or some advertisers were built for the late night circuit, others would do best to avoid it. For a mattress company, overnight viewers may be wildly lucrative; for a food-delivery company, however, this would be painfully wasteful. 

Advertisers understand that timing matters in every linear broadcasting medium, and they have come to expect variations in pricing that accounts for the significant difference in response rates at different day parts. That difference derives from human behavior and states of mind; the on-demand nature of streaming does not erase those habits altogether.  

As such, dayparting is one aspect of linear TV buying that streaming networks are likely to adopt as the space matures. Programmatic TV, and automated & dynamic auction models, will take care of this in one fell swoop. With programmatic still in its infancy (at least with respect to dollars transacted), the burden today is on advertisers and their media buying teams to run their own analytics to uncover dayparting opportunities and allocate streaming spend effectively. Measuring streaming outcomes is only half of the equation; measuring the quality of the impressions delivery in context is the other half.  

Tatari is a TV media buying agency with a growing practice among DTCs. Philip, their founder, previously ran TrueCar and Shazam before exiting both. 

Dish Network is tackling what it hopes to be a lucrative market for multiple dwelling units (MDUs), offering apartment owners and developers a bulk managed WiFi and video product it calls Dish Fiber.

Dish Fiber, to be announced at the Apartmentalize convention in Denver Tuesday, will let apartment building owners package a managed WiFi service -- with speeds up to 1 gigabit per second -- and a bundle of video programming with packages ranging from a live streaming TV service with 24 channels selected by the property to fuller video offerings through its Dish's Hopper hardware.

The streaming TV service uses Smartbox, Dish's headend video distribution platform for commercial applications, via a single, centralized satellite dish and delivered over the property’s IP network. This configuration eliminates the need for individual satellite dishes and a separate coax network for video. 

Dish said residents can upgrade video service without a credit check, long-term commitment or a technician visit.

“The decision of choosing an internet and TV provider has historically been left to residents, which is more complicated and time-consuming for the consumer, and limits property owners’ revenue opportunity,” Dish TV group president Brian Neylon said in a press release. “By eliminating the common pain points often associated with competing providers, Dish Fiber provides residents with the services they want in one solution, while giving property owners more ways to monetize their highly-valued amenities.”

Dish Business director of product and business development Josh Rowe said the internet service is delivered through a DIA [Dedicated Internet Access] circuit to the property either through a direct fiber connection or a point-to-point millimeter wave connection where fiber is aggregated to a central location and delivered wirelessly. “Ultimately we own those connections into the building, so it is fully managed by Dish.”

Dish Business general manager of business development Nate Block said that in a recent interview 94% of residents ranked high-speed internet as the top apartment feature.

“It’s really moved beyond an amenity and is now a utility,” Block said. “No one has to wonder what kind of electricity or water they’ll have, they just expect when they move in, when they switch on a light or turn on the tap, it’s going to work, The same is not true of internet services generally.”

Dish wouldn’t disclose active customers for the service yet, but said it has tested the offering over the past year at several different property groups. 

“Our target market is anywhere in the U.S.,” Block said.

Dish said property owners can select which 24 channels they offer residents from a pool of channels that includes local broadcast stations.

“It gives the property owner some ability to customize that lineup to best meet their demographics,” Rowe said.

Property owners buy the internet service and can set the resale price to either maximize profit or use it as a differentiator and offer it for free.

“Frankly some of those properties have said this is a really valuable amenity and we may just provide it as such,” Block said. “[They’re] saying, ‘Our differentiating point in the market is that we provide this for free and that’s why somebody would rent from us or stay with us versus going to another property.’ It’s a lot about empowering these properties to manage that infrastructure that best fits with their business plans.” 

A study on so-called peak TV and streaming reveals just how elevated a perch television is enjoying in pop culture.

Fully 72% of respondents  to a survey by Miner & Co. said they choose TV shows over movies these days, while 67% said they are streaming their favorite TV shows at the expense of reading. Furthermore, 85% said they have a summer streaming list, while 76% have a summer reading list.

Miner & Co. Studios surveyed 801 TV viewers between the ages of 18 and 59.

"For the past few years, streaming has tended to drown out conversations about broadcast and cable, and it continues to gain strength as a preferred platform for viewing,” said Robert Minor, president, Miner & Co. Studios. “But the investment in quality scripted across the board has, at least for now, captured viewers’ attention across all options – broadcast, cable and streaming. The choice, convenience and control of streaming will continue to hold very high appeal but content is key – especially in attracting and retaining viewers.”

Not surprisingly, streaming and cable scored the highest for delivering great television; perhaps more surprising is that broadcast, which goes largely ignored at the awards events, was a very close runner up. Some 87% of respondents said streaming services, such as Netflix and Amazon, are “very” or “somewhat” reliable sources for great television. Cable too had 87%, though the subset of premium cable scored 83%. Broadcast networks came in at 86%.

Among respondents, 77% said there’s no such thing as too much good TV.

Read more at broadcastingcable.com.

The National Cable & Telecommunications Association's rebranding of its annual show to "Internet" and "television" was clearly the right way to go if a new survey has it right.

According to just-released findings, 80% of video streamers subscribe to at least one streaming service in addition to, or instead of, a pay TV service from a cable, satellite or IPTV company.

The survey, commissioned by CSG International, which helps companies set up and cash in on online distribution, also found that 79% of streamers primarily stream to their TV sets.

Among millennials, more than half spend more time watching Internet video on their TVs than traditional TV programming.

Almost three-quarters (72%) said sports programming is the most important to stream.

"[S]treaming services with the highest subscription rates offer original content and sports content," the study found. "To align with these trends, the ability to offer new skinny bundles and innovative OTT-like services will become increasingly important for pay TV providers."

Streamers said they are watching more than 26 hours of online television each week, with half of that on services including Netflix, Hulu and Amazon Prime.

The report concludes the way to get a bigger piece of that online video action is "not by an intensifying price war, but by offering more options for packaging and pricing the specific content that streamers want."

"Personalize the bundle," CSG said. "Provide a user experience on par with the most popular competitors, making content transportable across devices and providing enhanced features like recommendations and search, not only for a single service but across as many distinct services through partnerships wherever possible.

"Offer aggregated billing, discounting and payment options to the all-important subscribers of more than one service or type of content," the report advised.

Millennials see decreasing value in traditional pay services, the survey found, and 20% said they planned to switch, downgrade or disconnect their pay services in the next six months.

They also are the biggest commercial skippers (via bathroom breaks and snack runs in particular). "Among those 18-24, 43% always or often avoid commercials, compared to 35% of the general population," the study said

In a finding that could buoy, at least slightly, FCC chairman Tom Wheeler's push for uniting video services in a single access device, 48% said they would "greatly value" centralized search across all their paid subscriptions, regardless of provider. (But cable operators note they are already launching apps that can reside side-by-side with other online services on, say, a Roku platform, just not disaggregated program streams and data, as the chairman has proposed.)

The survey was conducted in January among 1,900 randomly chosen adult broadband users who stream video -- short- or long-form, free or paid service -- on one or more connected devices.

CSG clients include Charter Communications, Time Warner Cable, Comcast, Dish Network, ESPN and Verizon.

When Vince Gilligan, the creator of AMC’s crime drama Breaking Bad, beat Netflix’s House of Cards for the Emmy Award, he made a surprising observation. Netflix, he told reporters, kept his show on the air.

Breaking Bad’s audience started small, but ultimately reached 10 million viewers for the series finale. Gilligan theorized that his show grew in popularity because as word of mouth spread, new audiences were able to find old episodes on Netflix, then join the growing realtime audience when it was back in season.

A few years later, the data has proven Gilligan correct. Viewers haven’t abandoned linear viewing in favor of non-linear, VOD and streaming options, as previously thought. Instead, the viewer path between the two distribution models points to a more complex ecosystem.

Some view cord-cutting as the trend that will kill television. The trouble with that assertion is that it runs contrary to the data. Millennials are the ones leading the cord-cutting charge, and yet millennials are watching more television than ever. So what’s really going on?

Put simply, we’re at the dawn of a new paradigm that reflects both a technological revolution in the way we distribute content as well as an equally powerful shift in consumer behavior. For now, it’s clear that cord-cutting is a nuanced and evolving phenomenon.

Consumers are already beginning to understand that networks typically reserve a show’s current season for linear broadcast, while at the same time making previous seasons available on streaming platforms like Netflix so that new audiences can catch up. Meanwhile, data shows that streaming originals have only added to a typical viewer’s queue, rather than replace network fare.

Historically, TV has been a zero-sum contest. Because programming was linear, a network won or lost the night; a show was a hit or it flopped. But that’s no longer true today because technology and consumer behavior are changing.

As we expand access to content through a variety of platforms, and consumers adapt to a new viewing paradigm, the nature of competition changes dramatically. Data shows that audiences find shows long after their initial release. Just as telling, shows like Netflix’s Jessica Jones and Marvel’s Agents of S.H.I.E.L.D on ABC both brought in big audiences (4.8 million viewers and 6.8 million viewers, respectively) though they were released at the same time. In a linear TV world, two superhero shows would most likely split the audience. The data shows that new distribution methods enable viewing patterns that allow both shows to succeed.

These changes are good for content companies because they mean quality shows are more likely to find an audience sooner or later. What remains to be seen are the strategies content companies will develop to gather those audiences. In the meantime, the television industry must use data to tune in to the viewer path.

Charlie Buchwalter is president and CEO of crossmedia measurement firm Symphony AM.