Networks Creep Towards A La Carte
It is an open question whether most of today’s linear programming networks (delivered using one or more fixed or satellite networks) could exist if they had to go direct to consumer as stand-alone streaming packages, as does HBO, or as a few other networks might contemplate.
So far, channels historically not supported by advertising have had the easier time of the transition. HBO, Starz and Showtime, for example, can be purchased as streaming services.
A key issue is consumer expectations about cost of a single channel. Surveys show consumers expect a cost of about $2 per channel, per month, roughly five to eight times more than many channels now charge.
Few streaming channels are sold for such prices, though, suggesting the economics of stand-alone streaming---for most channels--does not allow the expected pricing of a couple dollars per month, as one might deduce from today’s 40-channel bundles selling for up to $40 a month.
CBS sells streaming access as well, suggesting the possibility that the most-watched ad-supported channels might be able to create stand-alone streaming services.
A sort of hybrid step is allowing big retailers such as Amazon to handle sales and distribution. Amazon Channels feature:
- HBO ($14.99 per month)
- Showtime ($8.99 per month)
- Cinemax ($9.99 per month)
- Starz ($8.99 per month)
- Mubi ($5.99 per month)
- Sundance Now ($6.99 per month)
- Sports Illustrated TV ($4.99 per month)
- Comic Con HQ ($4.99 per month)
- History Vault ($4.99 per month)
- Comedy Central Stand-Up ($3.99 per month)
- PBS Masterpiece ($5.99 per month)
- IndiePix Unlimited ($5.99 per month)
- DocComTV ($2.99 per month)
- Smithsonian Earth ($3.99 per month)
- Reelz ($3.99 per month)
- Daily Burn ($14.99 per month)
- PBS Kids ($4.99 per month)
- Shudder ($4.99 per month)
- Cheddar ($2.99 per month)
Some will point to the success of Netflix, Amazon Prime, Sling TV, DirecTV Now, Hulu and others.
Some of those services still use a bundling concept (a menu of TV shows, movies and specials), but not discrete channels. Others use a “skinny bundle” of channels to keep costs lower.
And while Disney and ESPN will undoubtedly be early to test the economics of single-channel streaming, most other networks are likely to resist, as it remains profoundly unclear whether such a strategy would be profitable.
Also, bundles remain popular with consumers, leading to the creation of “skinny” bundles that cost less because they contain fewer channels (and therefore less “cost of goods”).