While Bruce Springsteen may have sang about “57 channels on nothing on,” today’s Platinum Premium Plus cable systems often feature close to one thousand channels, few of which get watched with any regularity.
Now granted most of those are variations on a theme--SD and HD versions of the same networks, for example, but once you got past the top 20 or 30 or so cable networks, I’ll bet most people would be hard-pressed to be able to tell you what programming was on most of them.
Which is why cable TV is in the place it’s in today--and why the FASTs, the free ad-supported streaming TV services, increasingly look like they are going to be the “cable killers”--not Netflix.
Allow me to explain.
Those lesser cable channels rarely feature original programming, relying instead on library content (aka “reruns”) of older network TV shows and older movies. The shows are programmed on a linear schedule and viewers looking to watch, say, reruns of Law and Order can jump right in, without having to decide which of the hundreds of episodes they want to watch.
Also read: Roku Expands Live TV Channel Guide with Addition of Premium and OTA Channels
If that sounds a lot like the linear channels on the FASTs, you’re not the only one who’s noticed.
Those linear channels, which are often grouped by genre, have become very popular and can be found on many of the FASTs right now. And unlike their cable brethren, they’re free and offer much lower ad loads.
That’s why it’s easy to see a future where viewers subscribe to a number of Flixes--the multibillion dollar SVOD services--to watch original series and other high profile programming, and then have the FASTs for when they want to watch the equivalent of “cable channels that aren’t CNN or Discovery.”
Spreading The Love
There’s another angle in here too--many of those smaller cable networks are starting to look at whether striking deals with the FASTs or the Flixes (or both) makes sense for them. They make their money off of advertising. So it’s in their interest to be available on as many outlets as possible, where their ads can be seen by as many people as possible.
In preparing our upcoming TV[R]EV report on the FASTs, many executives we spoke with told us this was already a given, that smaller cable networks were already looking to strike deals that would give them their own channels on the FASTs and/or sections on the Flixes, and that they would eventually begin running their programming on these OTT outlets as well as on cable. The thought was they would start with older library content at first, but eventually (when the current round of contracts with the MVPDs expired) they’d bring their newer series and original programming to the FASTs as well.
At some point, to paraphrase several people “the whole cable thing will fall apart, the bigger broadcast and cable networks will decide it’s easier and more profitable to run everything on their OTT apps (Flixes), and the cable companies and telcos, which already provide broadband, will just switch their pay TV offerings to Flixes and FASTs.
(Or not. The intermediary that bundles the Flixes and FASTs for consumers may wind up being a device manufacturer like Roku, Amazon, Samsung and VIZIO, or it might wind up being an independent third party aggregator. My gut says that for a while, it will be all three.)
Better Than Cable?
For both consumers and advertisers, the FASTs can offer a superior experience to cable. For consumers, the fact that everything can be viewed via a linear feed or via VOD (video on demand) and on a range of devices means that they have options as to the type of experience they want. The FASTs are also likely to add some degree of personalization to their linear feeds, so that viewer A may get a different grouping of shows in their linear “Crime Drama” feed than viewer B, based on which series they’ve watched previously and what the service feels viewers in that demographic might like.
For advertisers, FASTs offer completely addressable inventory that is sold by audience segment, rather than daypart. That allows for better measurement and better targeting, which in turns allows more brands to begin running ads on TV.
The selling ads on an addressable basis part is key because without marquee original content running on a linear feed, the FASTs are never going to recreate the scenario where millions of viewers are all tuning in to the same channel at the same time. It also allows for better integration with subscription AVOD services and with popular FASTs like Tubi, all of whom are still VOD-only.
What’s fascinating about this is that it’s really just the proverbial rearranging of the deck chairs: the same players will be involved, they’ll just be distributing things differently and the role of the middleman, originally played by the MVPDs, is now likely to include device manufacturers and others as well.
The good news though, is that the new system should be a win all around, for advertisers, for programmers, for content rights holders, for device manufacturers, and above all, for consumers, who get better interfaces, more choice and fewer ads to watch.
