While much of Silicon Valley and the mainstream media seems to have bought into the fiction that there’s been a “massive wave” of cord cutting, those of us in the TV industry’s trenches know better.
As in, somewhere between 3%-5% of all pay TV viewers are going to cut the cord in 2021, leaving somewhere close to 70 million households with MVPD and vMVPD subscriptions by year’s end.
That rate could accelerate in 2022 though, thanks to the impending launch of two unrelated services: Sinclair’s RSN (regional sports network) apps and CNN’s streaming app, CNN Plus.
News and Sports
While the entertainment offerings on streaming today easily surpass the offerings on cable in terms of both quality and quantity, the same cannot be said for news and sports.
While there are a number of streaming news apps along with relatively live feeds from CBS, NBC and ABC News, the major national cable networks still don’t have a presence, save some channels on the FASTs consisting mostly of a series of clips strung together, rather than a live feed from the national news desk.
That seems like it’s about to change though, with the introduction of CNN Plus, the latest streaming app from Discovery Warner.
The app took a while to get here as AT&T, CNN’s previous owner, had allegedly been trying to unload the news service, and didn't want to take on the burden of a brand new streaming app.
That’s no longer the case though, thanks to the Discovery takeover, and CNN Plus is due to launch soon. The app will contain some form of live news: while it won’t be the same feed that appears on cable, much of the app’s news coverage seems like it will be live and allow for the transition to fully live in the case of an election or other newsworthy event.
The ability to finally get live cable news 24/7 is going to be the push many news-obsessed viewers need to finally give up traditional pay TV and shift to a streaming-only diet.
More will come too, if and when their local TV news is available on streaming, either from the local broadcast station itself or from one of the many start-ups (and Amazon) that are looking to make headway in that space.
Sports is another area where viewers have held on to pay TV. This is especially true for viewers who are professional baseball, basketball and hockey fans and rely on regional sports networks or RSNs.
These viewers are fans of a specific team rather than a specific sport. Meaning that if they’re Dodgers fans, they want to see Dodgers games and only Dodgers games, not whatever random MLB game ESPN is showing that day.
These are the fans who keep the regional sports networks (RSNs) in business, and until now, the only way to watch an RSN was via an MVPD or vMVPD.
Enter Sinclair, which recently spent $9.6 billion dollars to buy up the 21 RSNs that had previously belonged to Fox Sports.
While RSNs have traditionally been valuable properties, they’ve been hitting headwinds of late, as non-sports fans rebelled against the amount the RSNs added to traditional cable packages and the two largest vMVPDs -- Hulu Live TV and YouTube TV -- dropped them from their rosters.
Still, Sinclair is making the bet that there are plenty of MLB, NBA and NHL fans who are holding on to expensive cable packages for the sole purpose of watching their favorite team play. That’s why they’ve brought Ballys, a sports betting company, on board to help reduce subscription costs, and why they’ve just announced their intention to go ahead with a $250 million plan to launch their RSNs as streaming apps.
While initial reports had the monthly costs of the apps at $23, that appears to be erroneous (as per Sinclair CEO Chris Ripley). Still even at $40/month, a monthly subscription is about one-fifth the price of a pair of tickets to a single NBA game, and less than one-half the price of AT&T TV, the only vMVPD that’s still carrying the Sinclair RSNs.
In addition to bringing in cord-cutters in general, the apps will allow the leagues to appeal to younger fans by introducing new features that take advantage of digital delivery (e.g., real time stats and alternate camera angles), something that is very much needed as their fan bases are growing older every year.
Aging viewers are also an issue for the streaming news networks, where the average age is even older -- well over 60, and where a shift to streaming will need to include a shift in tone to appeal to younger viewers. (Pro tip: a move away from a steady diet of pharma commercials would also help.)
A Bigger Ripple
Once cable news and RSNs are firmly established on streaming, we can expect to see a somewhat bigger ripple of viewers moving to cut the cord. Figure 8%-10% a year, versus 3%-5%.
Those expecting a massive wave should remember that things move slowly in the TV industry, where viewer behaviors are decidedly ingrained.
That said, change is happening and will continue to happen, but at nowhere near the pace that other industries experienced. For all parties involved, this is one instance where patience will truly be a virtue.
Alan Wolk is the co-founder and lead analyst for media consultancy TV[R]EV
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