1. AT&T Goes Full Digital

AT&T finally admitted to doing what we’ve long assumed every MVPD is going to do: move all their pay-TV subscribers to digital.

Why It Matters

While AT&T should be commended for this bold and forward-thinking move, it also makes a whole lot of sense for them to go first.

Why? Because 5G and satellite and HBO.

Allow us to explain.

Despite giving lip service to the notion that viewers can “BYOB” (Bring Your Own Broadband), there’s no way, given 5G’s national reach, that AT&T is not going to make new subscribers a better offer, namely a bundle of 5G broadband plus some flavor of DirecTV Now (DTVN) or WatchTV (WTV), along with a seriously deep discount on HBO/Warnerflix.

And they’ll push them there faster than anyone else because well, because satellite delivery is pretty old school and not particularly upgradeable and (no matter what they try and do to it) it kind of falls apart when it rains, which seems to be happening a lot these days (thank you global warming) and then there’s that ugly AF dish you need to put on your roof and all the attendant class markers associated with it, justified or not.

There’s also Uverse which is a big ball of “meh.” You know, it doesn’t have fiber optic like FIOS or a cool X1 interface like Comcast and no one know if it’s supposed to be “Uverse” or “U-Verse” or even “U’verse.” Mostly because no one cares enough to figure it out.

With DTVN and WTV, AT&T can offer up bundles of many, many different sizes, from bundles that look like pay TV today, all 300 plus channels packed in like happy sardines, right down to WTV, with its super skinny bundle that includes “I'd cut the cord, but...” favorites CNN and HGTV for just $15/month. (No sports though.)

And you know who else is going to start moving all their subscribers to digital?

Everyone.

It just makes a whole lot of business sense.

Yes, there’s an argument that there are greatly increased server costs in digital delivery along with the loss of set top box rental fees, but those will be more than offset by (a) no more rolling of trucks to service said set top boxes, (b) no more install techs missing appointments, causing users to hate their cable company with the heat of a thousand suns, thus causing them to wind up on annual "most hated companies in America" lists,  and (c) the MVPD’s ability to upsell new digital customers on faster cable. So while moving you from 25 mbps to 250 mbps may cost the MVPD pennies, they can use that extra speed to add $15-$20/month to your bill.

Kind of a no lose situation.

Users will come out ahead too, as the new all-vMVPD, all-the-time universe will finally bring home the promise of TV Everywhere, with interfaces that are easily ported from device to device, are user friendly and actually look good. (That’s the whole “paying Nordstrom prices for Kmart service” bit we keep banging on on about, the fact that viewers are particularly annoyed about paying over $100/month for set top box interfaces that look like they were designed in the late 1990s by unemployed Stasi interrogators.)

So there’s all that good stuff, plus the fact that most of the new vMVPDs are likely to allow you to BYOD too (Bring Your Own Device.  Meaning if you’re a big Roku fan, and you already have a device, all the MVPD has to give you is an app.

Easy, peasy, lemon squeezy, as our favorite spokesgekko might say.

What You Need To Do About It

If you’re an advertiser, that ad-supported OTT thing is about to get way more real. Good thing TVREV’s next Special Report, co-authored by Mike Shields and Alan Wolk, is all about ad-supported OTT. (How’s that for a shameless plug?)

If you’re a network, you’d better figure out how you’re going to deal with the switch to digital, both from a tech POV and from an advertising POV, the latter being far trickier than the former.

And if you’re an MVPD and you haven’t started figuring this stuff out yet, you're kind of screwed? (Though we highly doubt any of the major players actually haven't thought about this. A lot.)

 

2. Netflix Goes Full Mobile.

Over on the ad-free side of the living room, Netflix is having problems with all those pesky foreigners.

Seems a lot of them don’t have television sets. Or credit cards. Or enough income to support paying $10/month for Netflix.

Even with 700 new original series.

That’s why Netflix announced they were introducing a lower-priced mobile-only plan in Malaysia, where the price would now be closer to $4/month, provided the viewer only watched on a mobile device.

Why It Matters

Seems like Netflix is finally becoming aware that they’re not in Kansas anymore.

Or Sunnyvale or Palo Alto.

Few people in the developing world can afford to pay U.S.-level prices for Netflix, something that local providers like India’s HotStar are leveraging to their advantage, offering very low subscription fees, ad-supported options and pay-as-you-go micropayment options to gain huge chunks of market share.

Netflix is trying. They’re fast learners and they are making a big push with local content efforts. It’s just hard for them not to be seen as American interlopers and/or the Rolls Royce of SVOD services, something that's fine for the upper classes, but not for the (far more numerous) common folk.

Which has a lot of people (ourselves included) thinking they may need to roll out an ad-supported version in places like Brazil and India. Or at least a hybrid version like Hulu’s.

What You Need To Do About It

If you’re a global advertiser, you’ll likely welcome an ad-supported Netflix. They can, allegedly, do magic with all the user data they’ve collected (in a privacy compliant manner, of course) and that should come in very useful when you need to find an audience to target.