Virtual MVPDs "are gaining traction" and offsetting some subscriber declines among traditional MVPDs, Time Warner CEO Jeff Bewkes said in an analyst call Wednesday. He said they're demonstrating consumer demand for cheaper skinny bundle packages. He said AT&T's planned buy of TW is expected to close by year's end. Warner Bros. Entertainment CEO Kevin Tsujihara said TW continues to talk with motion picture exhibitors about "a premium video on-demand model" allowing for earlier home consumption of movie content. TW said Q1 sales rose about 6 percent to $7.74 billion from the year-ago quarter as operating income gained about 4 percent to $2.1 billion.
Q1 is usually strong for pay TV, but not this year, with subscriber numbers "suggest[ing] a litany of worst-evers" as cord-cutting is coming in full force, MoffettNathanson analyst Craig Moffett wrote investors Wednesday. Citing publicly traded MVPDs that have reported results, he said linear video subscriber losses are setting a new record for the rate of decline and for acceleration in rate of decline. Moffett said even adding in virtual MVPD subscribers, subscriber growth still declined. The cumulative number of households not subscribing to pay TV "is much too big to ignore, and it's only getting bigger," the analyst said, saying password sharing is potentially one large issue. "Perhaps the most obvious takeaway of all is that the [virtual MVPD] business looks like a truly awful one ... if the goal is to, say, make money," said the note. Time will tell which approach to dealing with declining video subscriber numbers -- Dish Network's or Charter Communications' -- will win out, said nScreenMedia analyst Colin Dixon in a blog post Tuesday. The two approaches are markedly different, he said, with Dish hoping to recapture cord-cutters through its cheaper, lower-margin Sling TV and Charter banking on exclusive content to slow the decline. "The attitude to change" is at the heart of the difference between the two, he said. Charter sees the decline as part of a long-term but orderly decline in MVPD subscribers, while Dish -- seeing the same trend -- "also sees an opportunity to take advantage of the change, and maybe even drive it," he said. The companies reported Q1 subscriber and other results this week (see 1705020053 and 1705010041).
Among Generation Z -- born between 1996 and 2011 -- 71 percent of entertainment consumption is in the form video streaming, with YouTube the most popular streaming site, followed by Netflix, live TV and then on-demand TV, streaming media company Awesomeness reported Monday. Seventy-nine percent of teens have a YouTube account. The report was based on surveys of 1,504 teens.
Pandora is partnering with Goldenvoice to deliver an exclusive audio live-stream of performances from the Stagecoach Country Music Festival, being held Friday through Sunday at Empire Polo Club in Indio, California, it said in a Tuesday announcement. Pandora customers will be able to access select performances from the festival from May 5-June 30, it said.
Thirty-two percent of over-the-top free trials convert to a paid subscription, said a Parks Associates report Monday. Acknowledging a potential for “free trial abuse,” Parks analyst Glenn Hower said only 1 percent of consumers are “serial trialers” who take advantage of free trials to avoid paying for services. More than one-fourth of U.S. broadband households trialed at least one OTT service in the previous six months, and 47 percent subscribed to at least one trial service after the free period expired, said the report. Spending on transactional services has fallen, but average monthly spending on subscription OTT video rose to $7.95 per U.S. household last year, it said. Most households build their services around at least one of the top three services -- Netflix, Amazon and Hulu -- which also have the most effective trial conversion rates, Hower said. "Since there isn't much money left for niche OTT services, these services should not expect to expand beyond their particular audience niche and may also have to implement tiered services or hybrid business models to diversify their subscriber bases and generate incremental revenue wherever possible,” he said.
Sling TV added Apple TV to the device compatibility roster for its First Look cloud DVR service, joining Roku and Android devices and PCs, it said in a Monday blog post. Customers with a Sling TV-supported Apple TV can add 50 hours of cloud DVR service to their subscription for $5 per month, said Chief Product Officer Ben Weinberger, and additional device support will be announced in coming weeks. The service allows users to record Sling TV content and watch it later, but functionality isn’t available on all channels. Subscribers can record multiple programs simultaneously, said Weinberger. Recordings won’t expire for subscribers who maintain a current account, but the service will delete older recordings as necessary to make room for new ones, he said.
Cord-cutters and cord-nevers eschew traditional MVPD service but differ in programming and over-the-top preferences, GfK said in a news release Monday. It said its triannual Cord Evolution survey found four of the 10 top streaming shows among cord-nevers -- who have never subscribed to a MVPD service -- aren't widely watched by cord-cutters -- who used to but no longer subscribe. It also said cord-cutters' 10 favorite shows all are Netflix programming, while three of the 10 favorite programs of cord-nevers are found on Amazon or Hulu. It said Netflix is cord-cutters' most-popular streaming service, but YouTube tops Netflix among cord-nevers. It said 60 percent of cord-nevers are "very satisfied" with their TV access, compared with 50 percent of cord-cutters, but 22 percent of cord-nevers plan to subscribe to a traditional TV service in the next six months. GfK said the data comes from a survey of 10,000 U.S. respondents.
Pay-TV operators who provide a hybrid of traditional and over-the-top services likely will be most successful, said Irdeto Senior Vice President-Global Sales Bengt Jonsson in a blog post Monday. Likening pay-TV to the retail industry where traditional retailers are struggling with e-commerce competition, Irdeto said success could lie in trying to satisfy both young viewers -- who are largely online in their viewing -- and the growing population of aging consumers "who may prefer TV’s traditional lean back experience, where searching for something to watch is not in their comfort zone."
Dougherty & Co. maintained a neutral rating on Pandora in a Friday note to investors before the company’s May 8 Q1 earnings report, having “more questions than answers,” analyst Steven Frankel said. “Mounting losses, an uncertain path to profitability and on & off again takeover rumors” pushed Pandora shares down 20 percent year to date amid “chatter” that the company could be seeking a capital infusion from private equity, Frankel said. Dougherty is modeling Q1 at revenue of $317.1 million based on a 10 percent falloff in listening hours to 4.97 billion and a 27 percent uptick in operating expenses to support the rollout of new subscription offerings. Frankel questioned whether Pandora’s subscription products -- Plus and Premium -- can drive a material revenue uplift “without a required marketing spend that bleeds the P&L for an extended period of time.” Pandora has been promoting Premium as a simpler approach to subscription music streaming that builds off subscribers' tastes and listening history, but Frankel questioned what Pandora has to offer that’s superior to or differentiated from Spotify, with its 50 million paid subscribers, or Apple Music, with 20 million paid subscribers. Pandora trickle-launched the $10-per-month Premium on-demand service by invitation only in March but opened the doors this month to a much broader listener segment with access to iOS and Android phones, Google Chromecast, and car integration with Android Auto, Apple CarPlay, GM, Honda, Hyundai, JVC Kenwood, Mazda, Pioneer and Subaru, a company announcement said. The announcement said Premium is available to all listeners, but that doesn’t include desktop PC users. A footnote said Pandora Premium will be available on other platforms, “including desktop and popular connected devices, in the coming months.” Pandora didn’t respond to questions.
Sling TV is now available on most 2016 LG smart TVs and will roll out to 2017 LG webOS 3.5 TVs in coming months, the over-the-top service said in a Wednesday announcement. With Sling TV integration, LG smart TV users will be able to watch live and on-demand Sling TV content without having to switch inputs or add a streaming box, said the company. Users can download Sling TV, the first live and on-demand OTT service available on LG TVs, from the LG launcher bar or via the LG Content Store, it said. More than 15 platforms support Sling TV with packages starting at $20 per month for Sling Orange and $25 per month for Sling Blue, said the service.