Venu Gets Mouse Trapped, Zuck Might Have Stepped In It
1. Venu Gets Mouse Trapped
I am often asked to identify the “big themes” I saw at various industry events, as if I was the only one cognizant of the fact that you could not walk ten feet in the Cosmo or Aria at CES this week without hearing the word “AI.”
But CES was not about AI. That’s just a useful buzzword.
CES is about seeing people and making deals. Not going to conferences.
Which is why the two biggest pieces of news last week had nothing to do with CES.
The first was the announcement that Disney had decided to buy Fubo, The Little vMVPD That Could, a move that, as I will explain, effectively kills off Venu, the ill-fated sports aggregation app Disney was planning to launch with WBD and Fox.
Fubo, which has built a reputation as a sports-focused vMVPD, was suing the Venu partners over the app’s launch claiming that it would unfairly restrict competition in the sports streaming market in an antitrust violation sort of way.
They were granted a temporary injunction back in August and said injunction was upheld again last month, with a trial date set for October 2025.
Which, according to the laws of these United States, meant that Venu could not be launched until October at the earliest.
Disney’s lawyers, being prone to settling lawsuits rather than litigating them, then cleverly decided that the best way to make the lawsuit go away was to buy Fubo.
Which they did last week (Disney will have 70% ownership) for an undisclosed number of millions.
Why It Matters
Disney will combine Fubo with their Hulu Live TV vMVPD product and will offer an ESPN-centric sports package off of that, said package being in many ways similar to Venu in that it will aggregate live sports. (This becomes important later on, so stick a pin in it.)
Hulu Live TV will not fully go away though either. It will live on as a product that gives its viewers free access to Hulu. Whereas the new Fubo Live TV will not include Hulu.
Because… I’m not really sure. I suspect they are thinking they can price Fubo Live TV well below YouTube TV and start chipping away at its allegedly large market share.
Allegedly large market share?
Well, neither Disney nor Google regularly release subscriber numbers or revenue numbers. So we are left to rely on educated guesses from the likes of MoffatNathanson. Whose guesses are indeed quite educated. But still very much guesses.
So there’s that.
Then there’s the “why.”
And for that, we will need to back up to the launch announcement.
You see friends, Venu was supposed to have launched with WBD’s sizable passel of NBA games. The ones that ran on TNT and featured Charles Barklay as announcer.
Only WBD misplayed their hand (how’s that for a euphemism) and lost those rights to Amazon.
Oops!
So Venu, which was sort of sketch to begin with in that it was missing all of CBS and NBC’s NFL games, now lost a big chunk of its basketball content. Which mattered because NBA fans are a good decade or so further away from retirement than NFL, NHL and MLB fans.
Which is the sort of thing advertisers focus on.
Not to mention that they’re far more likely to want and understand how to use a $42/month streaming sports app.
So there’s that too.
And so now we have a situation where Disney has its own streaming sports app (the Fubo one I told you to stick a pin in.)
And if you think they’re going to sell against that app, I’ve got a bridge to sell you.
Meaning that it’s highly likely that Venu is dead in the water. I mean it wasn’t like Disney was going to announce it planned to kill off Venu at the same time it announced the Fubo buyout. They need to kill it off gradually, so the death seems inevitable and they don’t seem vindictive.
But wait! There’s even more!
As part of the acquisition deal, Fubo agreed to drop the lawsuit. So a win for Disney.
Or not.
You see, yesterday, DirecTV and EchoStar (Dish) called bullshit on the deal, and wrote strongly worded letters to the judge in Fubo’s antitrust case, claiming that the Disney-Fubo deal did not solve any of the underlying issues around Venu and that the antitrust issues still remained.
Meaning that unless Disney wants to buy both those companies too (that’s a joke) it is highly, highly, highly likely that Venu will not see the light of day.
That’s three “highlys”.
Just in case you were counting.
What You Need To Do About It
If you are a major media company and thinking about setting up an aggregator anything, you need to make sure all the other players are on board too.
All of them.
The lesson from Venu isn’t that the Fubos of the world will sue you, it’s that no one was ever going to pay $42/month for an app that didn’t have NBC and CBS’s NFL games in it.
If you are a vMVPD, you have a valid point in suing. But just be aware that the streaming services all have untold billions they can use to buy up all the sports rights they want. So ride the wave while you can, but be aware that it’s going to hit shore sooner than later and leave you high and dry. (How’s that for an extended metaphor!)
If you are a sports fan, it’s not going to get any easier, at least not for a while.
What you have to hope for is that the various leagues insist that the streaming services allow OEMs and other TV operating system owners to provide direct links to all their games from one easy to use “here are all your live sports games” interface.
I just wouldn’t hold my breath though.
2. Zuck Might Have Stepped In It
The newly fashion-conscious Mark Zuckerberg announced last week that he was doing away with his paid third party content moderators and would rely instead on Trump-friendly community notes to flag any sort of objectionable content.
The progressive internet was unsurprisingly aghast at this literal violence and threatened to delete their Facebook accounts.
If, of course, they could find them, because really, who uses Facebook anymore?
Which of course brings up the possibility of an actual sea change.
Why It Matters
Follow me here.
Facebook still has a thriving business in running ads for small and medium businesses that can use its incredibly precise targeting capabilities to hit their audiences.
Or can they?
That’s a relevant question when you factor in how infrequently people use Facebook these days.
Which means their data is likely anywhere from fairly outdated to very outdated.
Maybe you’ve moved since you last posted. Maybe you’ve decided to stop doing yoga. Maybe you got a cat.
See where I’m going there?
TV meanwhile, is launching a fairly aggressive push to create self-service models for small and medium businesses, using the magic of AI to seamlessly create commercials for the likes of everyone from local car dealers to local bakeries.
The price of producing a commercial being one of the biggest roadblocks to SMBs running TV commercials.
So bear that in mind when you consider the distinct possibility that Facebook becomes rife with misinformation in a way that makes X look like Walter Cronkite.
Because while X is indeed rife with all sorts of hate and lies, you sort of have to go looking for it. If your Following feed is mostly sports teams and mainstream celebrities, you’re not going to see it.
But if your Facebook feed is empty because your friends haven’t posted since 2021 and the aforementioned sports teams and mainstream media properties rarely bother to post too, then there’s going to be a lot of crap following your feed. (Especially since Zuck now wants to prioritize “civic discourse.”
And if that becomes the case and people start to notice and there’s still background noise about boycotting Facebook, then it’s easy to see how the local coffee shop, which has had its Facebook campaign on autopilot since 2017, might be tempted to switch to giving a self-serve CTV campaign a try.
There are a whole lot of variables here though.
Scale: Buy Facebook and you’re buying pretty much everybody. CTV is still a series of walled gardens, each with a small audience. For self-serve to actually work, those ads need to reach all or most of the target.
Instagram: Meta owns Instagram and it is as popular as ever—possibly even more so if TikTok gets banned. Right now most Instagram ads are DTC companies (my feed, for instance, is filled with fitness and travel products. Alpaca socks being particularly prevalent right now as they appear to fall into both camps.)
So the question is whether Meta will transition many of those SMB accounts to Instagram. Which also attracts a decidedly younger audience than Facebook.
Something to most definitely keep an eye on.
What You Need To Do About It
If you are a CTV company of the sort that might sell self-serve ads to SMBs, then you need to figure out a way to make it easy for those ads to appear on multiple platforms, not just yours. Because without scale, your efforts are dead in the water.
If you are Meta, be aware you have a potential issue on your hands and figure out how to put those local ads on Instagram without messing with the vibe. That may not actually be possible, but you need to figure out if it is.
I'd also add that fact checking does not need to be an either/or thing. Just because you felt your old crop of fact checkers were falling down on the job does not mean that all fact checkers will do the same.
If you are an SMB, yes Facebook is easy. But if no one is actually on there and it feels old and stodgy and weird and full of spam, well, my friend, that rubs off on you.
And not in a good way.
