Consumers have tolerated years of
bloated video programming tiers with annual rate increases well in excess of
the generate inflation rate. They have not had any options largely because no
intermediary wanted to tick off a key programming source.
Seemingly overnight, intermediaries
have begun to offer smaller and presumably cheaper bundles of programming. If we’ve reached a tipping point, perhaps
intermediaries have grown bolder in light of programmer experiments with
disintermediation, the elimination of an intermediary heretofore able to impose
a markup for little value enhancement.
HBO, CBS, Netflix, Major League Baseball and others now offer a viewing
option requiring a broadband subscription without also requiring a pay
television subscription.
Will these new skinny bundles offer
consumers a cheaper and better value proposition? Don’t bank on it.
Savings, if they occur, will flow to
consumers that eschew all sports content networks and refrain from the most
costly non-sports networks. So if the following
content providers offer you “must see” video, a skinny bundle probably won’t save
you money: any and all ESPN channels, any Regional Sports Network, TNT, Disney,
Fox News, NFL, USA and TBS.
Programmers, new packagers like Hulu
and incumbent distributors know how to blend must see and never see video. Those undesirable channels do not add much by
way of cost and get added, largely because content producers like to expand
their “shelf space” with ancillary channels.
A skinny bundle likely will not have
must see content in inventory, or will require supplemental payments. No one has announced a true a la carte single
network purchase option, instead offering smaller, additional tiered, themed content
like sports, children’s programming, lifestyle, etc. as Verizon has proposed.
Bottom line: even if you might make
do with 7 -15 channels, others in your household typically won’t make do with
the same ones you like, or the skinny bundle inventory.