1. Dish’s Revolutionary One Day Pass
Given the insane news cycle of the past few months, the media can be forgiven for letting Dish’s revolutionary Day Pass on its Sling TV app slip under everyone’s radar.
Or at least that’s what I am telling myself.
Because what they did was hella pirate: instead of making people sign up for a month, let alone a year, Dish is giving them the ability to sign up for a single day of its Orange service or even a weekend.
They’re not coy about the “why” either.
Their marketing material explicitly says, “Perfect for a big game, an awards show, or an impromptu movie night.”
In other words, TVOD. (Transactional Video On Demand, aka Pay Per View.)
Why It Matters
Since the advent of streaming, churn has been a major issue for the television industry.
At first, it was downplayed as a rumspringa of sorts for consumers who’d spent decades tied to ironclad multiyear cable contracts. But that proved not to be the case. Consumers did not see any reason to pay for most streaming services if they were only going to watch a single show.
And so churn continued to be a thing.
The obvious question was why not give viewers the ability to pay for the show or game they wanted to watch?
And the answer, which seemed every bit as obvious to the MVPDs and streaming services, was “W the actual F are you thinking? Are you INSANE? Why would we even remotely entertain the thought of letting them do that????”
Because you see the media companies relied on subscriber numbers to make Wall Street happy. Not to mention their own internal “stakeholders.”
They feared too that giving consumers the ability to subscribe for just a single day would completely undermine the entire subscription business model they’d so carefully built. While simultaneously giving consumers the upper hand.
OTOH… There has long been a tacit understanding that subscription television is only a viable model in the developed West. That in much of the Global South there is no such thing as "disposable income” and that when there is, it’s not going towards something as frivolous as a pay TV subscription.
So if Netflix, Amazon et al are to succeed in those regions, they’ll need some sort of low-cost pricing plan.
FAST would be the obvious answer, but the CPMs in that part of the world are minuscule.
Which is why the idea of a TVOD service has always seemed so appealing: viewers could pay to watch a particular movie, sporting event or even an entire series, the streaming service would then have their contact information and credit card number and could continue to try and upsell them.
The thing is, no one expected it to happen in the US first.
The Dish One Day Pass has the potential to be all sorts of disruptive in the US market.
Rather than continue to pay exorbitant prices for bundles that include sports, fans can simply pay for the games they want.
Or, just as likely, the games they are hosting.
Having a bunch of friends over to watch ESPN’s big match? Then in addition to pizza and beer you’re on the hook to buy the one day pass.
Coming back to reality though, it’s unlikely other services will adopt this sort of pricing model.
Unless, of course, they feel they have to.
Should consumers start demanding it, and should just one other service break ranks and join Dish, then major media companies could increasingly feel pressure to offer these sorts of packages.
In our time-crunched world, few people have the luxury to watch as much sports as they like, a problem compounded by the growth of televised sports.
So why not do it a la carte?
One more reality check: While Dish’s Orange service does have ESPN and TNT, it does not offer local broadcast stations. Meaning that games on ABC, NBC, CBS and FOX are not available.
Which may mean that the plan is more PR hype than reality.
Either way though, it’s opened a Pandora’s box of possibilities.
Because one-day passes, where the service gets a viewer’s email and credit card number, can be a very effective marketing tool.
What You Need To Do About It
If you are Dish, well done. You have always excelled at shaking things up, and even at a time when so many people have (unfairly IMHO) written off satellite TV, you are still managing to make waves.
If you are one of the streaming services, a one-day pass is something to consider, especially for sports and events like the Oscars.
You get to avoid all those nasty churn numbers—no small feat—and you get a whole lot of marketing leads.
It’s also why I think, looking at the bigger picture, your best defense against churn is to roll out some version of a FAST. You can fill it with your library shows and older seasons of current shows. That keeps potential subscribers in the mix, while at the same time letting you market to them. Either directly (you have their email) or indirectly by surfacing older seasons of shows that are still on the air in the hopes they’ll then subscribe.
Think of it as a three-legged stool: ad-free subscription, ad-supported subscription and FAST. Your goal is to keep at least 60 percent of your subscribers in those last two buckets in order to create the sort of reach advertisers are looking for.
Worth a shot for sure.
2. Newsmax Is Not Happy About Losing The 39% Rule
There’s been a lot going on in local TV these days, and not just TVREV’s new special report. (How’s that for sliding a plug into the lede).
The Nexstar/Tegna deal seems to be progressing along and now we’ve learned that Sinclair has bought a stake in Scripps, a company it would ultimately love to scoop up. (See Tim Hanlon’s take at TVREV.)
This is all bumping up against what is known in the US as the “39% Rule” which says that no one company can own TV stations in markets that make up more than 39% of all US households.
Dismantling that rule has been a goal of Trump-appointee Brendan Carr’s FCC and there are also reasonable people who feel that given broadcast TV’s reduced role in our information ecosystem, the rule needs to be eliminated or relaxed.
So I was more than a bit surprised to receive an email from Newsmax, the to-the-right-of-FOX news network, decrying the elimination of the 39% rule as the work of Satan himself.
Why It Matters
Okay, they didn’t actually say that (though I suspect they were thinking it). But the email was full of fire and brimstone over the potential takeover of local media across the US by that godless purveyor of liberal values, Nexstar and on social media they’ve been invoking the name of Chris Cuomo.
Which is no doubt somewhat worrisome if you are Newsmax, but I could not help thinking that what they were really reacting to was Sinclair.
You see, Sinclair also leans quite far right. And should Sinclair control an increasingly larger share of the market in red and purple states thanks to the Scripps deal and the elimination of the 39% rule, that would seriously impact Newsmax’s claim on many of the political ad dollars flowing into those red and purple states next year.
So there’s that and then there’s the ATSC 3.0 thing.
Scripps owns ION.
And ION owns the largest national network of full power broadcast stations. Enough to actually allow them to resemble a cable network. Sort of.
Now when they bought these full power stations some 20 years ago, no one wanted them.
They were often independent stations, religious broadcasters and the like.
But now those stations have value, thanks to ATSC 3.0.
ATSC 3.0?
For those of you not familiar with it, ATSC 3.0 or NextGen TV is a technology that allows for the transmission of WiFi-like streaming signals over broadcast.
That means users can “stream” sporting events to their phones and that ads can be made addressable and interactive.
And that data becomes much easier to collect.
Unfortunately, ATSC 3.0 is not backwards compatible, so you’ll need a new TV set to be able to get the signal. And even that is not guaranteed, as many OEMs have decided that configuring their new sets to support the new standard is not worth it.
It has also been noted that the audience for over-the-air television is largely older and less affluent.
So not the sort of people rushing out to buy a new TV when the old one works just fine.
But… (you knew there was going to be a “but”) ATSC 3.0 doesn’t just have to be for TV.
The signal can be leased to everyone from auto manufacturers to IoT networks to emergency services.
And that is why it is particularly valuable.
Because the theory is that as self-driving cars get more popular, the ability to use broadcast signals to push everything from map updates to video will become huge.
Newsmax is definitely looking to the future and thinking that if Sinclair can push out right wing news using ATSC 3.0 signals to most of the US population, then, really what is their place in this world?
Especially in terms of all those millions of GOP ad dollars.
What You Need To Do About It
If you are the FCC, this is a tricky one. You do need to be able to ensure the news is fair and that no one voice dominates local news. While at the same time realizing that local TV news is pretty far downstream in the food chain in terms of where many people get their local news from, and that this is a situation that is unlikely to change.
So the question is which serves the population better: a system that puts local broadcast in the hands of a few big companies or one that would seem to guarantee its eventual obsolescence?
I don’t really know the answer.
If you are Newsmax…bashing Nexstar and The Libs is a clever play, but not sure it’s fooling anyone. We all know that Sinclair is a more direct competitor and is who you are really worried about.
If you are Sinclair or Nexstar—keep on keeping on. The more you can build a solid network of local broadcasters, the better shape you will be in for a world where local broadcast is no longer the news behemoth it once was.
If you are an auto manufacturer or you own a stake in an IoT venture and you haven’t looked into ATSC 3.0, now is the time.
If you are a loyal reader of TVREV— Happy Thanksgiving. We will be off next Friday for the holiday.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.