# NBCU's "add-on" streaming TV, Les Moonves' CBS All Access, and our wallets' future



## phrelin (Jan 18, 2007)

*NBCUniversal to Launch Reality TV Streaming Service in U.K., Ireland, Australia* is the headline on a PR spin story that explains the details of the new streaming service Hayu to be launched in March at around $5 a month:



> The company called it "the first all-reality service of its kind - curated and fully integrated with social media," saying it would launch in the U.K., Ireland and Australia on various devices, including mobile phones, tablets, laptops and connected TVs.
> 
> Among the shows on the service are _Keeping Up with the Kardashians_ and its spinoffs, the _Real Housewives_, _Million Dollar Listing_ and _Top Chef_ franchises, _I Am Cait_, _Made in Chelsea_, _Flipping Out_, _Shahs of Sunset_, _The Millionaire Matchmaker_, _RuPaul's Drag Race_ (U.K. and Ireland) and _Don't Tell the Bride_ (U.K. and Ireland).
> 
> "Targeting the broad base of viewers who are fans of the reality genre, Hayu combines a truly unique user experience with the best in over-the-top technology," the company said. "The streaming service will include a free one-month trial for over 3,000 episodes of reality content. New episodes will be added to the service every single week, the majority of which will debut on the same day as they premiere in the U.S., with 500+ episodes added to the service each year. The exciting collection of box sets means that fans of unscripted content can catch up on their favorite series from the beginning. Additionally, a host of series never seen before in the U.K., Ireland and Australia will be available via full box sets."


But what is more interesting is this take from a Sydney Morning Herald tech/gadget writer *NBCUniversal's Hayu streams reality TV overdose as pay TV bundle is reborn*:



> Will Aussies pay six bucks a month [$4.20 US] to keep up with the Kardashians in a crowded subscription video market?
> 
> As the new-look National Broadband Network gradually brings faster internet to Australian lounge rooms we're starting to look more attractive to foreign streaming video services. We're still a nation of pirates and geo-dodgers but the rush to embrace Australian Netflix shows we also have an appetite for legit streaming services.
> 
> ...


What he's noting here is NBCU's plans for streaming TV which burst forth in the U.S. When I started the thread Seeso - new streaming service for comedy from NBCU as I indicated in my post I was unclear about the ad-free "streaming channel." But I had missed stories such as this informative article *After SeeSo, NBC plans six more niche streaming services: *



> NBC has more streaming video plans in store after last week's launch of SeeSo, the new service for comedy geeks.
> 
> Evan Shapiro, NBC Universal's executive vice president of digital enterprises, recently told Decider that the network is planning at least six more streaming services for 2016. Shapiro didn't get into specifics, but said the strategy is "pretty well indicated by what we're doing with SeeSo," suggesting the new services will also cater to niche interests.
> 
> *Why this matters:* As I've written before, SeeSo represents a new kind of channel for the age of Internet video. Instead of subscribing to a giant cable-TV bundle, the average viewer might choose one or two premium services (such as Netflix, Hulu, or HBO Now), supplemented by cheaper niche subscriptions and free ad-supported services. We're already seeing Amazon pursue this strategy with its new add-on packages for Amazon Prime, and it seems NBC also wants to get on board with this approach sooner than later.


This genre-based "add on" approach coming from NBCU may be an indicator of the future of streaming TV - or not. NBCU owns a 32% stake in HULU (along with Disney at 32% and Fox at 36%) where in the U.S. right now for $7.99 a month with commercials or $11.99 a month without commercials one can go to watch "Keeping Up With the Kardashians" Seasons 1-10 along with comedy, procedurals, soap drama, scifi, etc. and subscribe to Showtime as an add-on. But Seeso at $3.99 a month without commercials has some comedy not on HULU including original content.

Fragmenting by genre is one approach. Another might be a "by network" (or by media company to be more accurate) approach such as CBS All Access at $5.99 a month which not only offers CBS shows but includes streaming your local broadcast channel live. As we all know CBS All Access will be the home for the new "Star Trek" series, which will appear only on all-access after its first episode debuts on CBS. According to Forbes last week CBS Chairman/CEO Les Moonves "is planning more original content and looking at taking some of his network's shows off the air and putting them exclusively on its subscription-based CBS All Access service, to compete with the growing popularity of Netflix and Hulu." And at yesterday's quarterly earnings call, according to Multichannel News Moonves indicated:



> CBS could follow online video pioneer Hulu with an ad-free version of its own over-the-top service CBS All Access, charging an additional $4 per month on top of the $5.99 monthly fee the broadcaster gets for the offering.
> 
> On a conference call with analysts to discuss fourth quarter results, CBS chairman and CEO Les Moonves said nothing is carved in stone, but that the company is considering offering an ad-free version of CBS All-Access.
> 
> "We're exploring it," Moonves said on the call. "We're not there yet."


Moonves has his worldview for the future of TV. IMHO it's clear in his mind that the future is the Netflix original programming model expanded to include live local broadcast stations. But he's moving slow and deliberately.

I know every viewer has his/her own preferences. I would like to free my wallet up from the costs of sports and reality TV. The NBCU genre model might work for me. But....

I've always thought that the best competitive alternative for viewers would be a network/media company model where each one - CBS, NBCU, Disney/ABC/ESPN, the Fox Entertainment Group, Viacom, Turner, etc. would compete. As the example CBS has gradually been shedding programming from unrelated production companies, focusing on their own subsidiaries. Plus CBS owns Showtime Networks (as well as 50% of The CW). Moonves mentioned putting programming from Showtime on CBS All Access. So far he has not talked about it as an add-on which is what it is on HULU and Amazon Video.

Ok. So what are these changes going to mean for our wallets? I can only reference my situation, so I hope I don't bore everyone.

I believe that beginning in May 2017 we will become cord cutters, I see us with some subscription combination like: ad-free CBS All Access - $9.99? - because we do watch more CBS TV than the other broadcast networks; ad free HULU - $11.99 - giving access to an adequate selection of NBCU, Disney/ABC, and Fox Entertainment Group and other programming; Netflix - $9.99 - for original programming; Acorn TV - $4.99 - which allows us the ability to watch a lot of good programming from Britain, Australia, New Zealand, Canada, and other countries; HBO Now - $14.99 - for original programming; Showtime - $8.99 through Amazon; Turner/iStream Planet - $??.?? - a future possibility for TNT and TBS content. (I'm ignoring Amazon Prime because we became members years ago without any video and would be today without any video and PBS because right now they stream for free.)

The problem is that at today's rates my subscriptions would total around $70.00 a month, prices are likely to climb, plus I will be tempted by others as the market expands. It's still a lot less than the $106.86 I pay Dish, particularly since I am paying for subscriptions to Netflix, Acorn TV, and others. While we won't need to pay for a monthly equipment charge, we will need to buy updated streaming hardware such as the Roku 3, Roku Stick and Amazon Fire TV Stick we now own.

There is a key differences between my Dish subscription and subscribing to streaming "channels." I don't have to keep all the streaming channel subscriptions year round. In theory we could rotate some of them after we've watched particular programming we consider "must see TV". So far none have a streaming channel contract minimum commitment terms, not even the subscription service Sling TV owned by Dish. Another difference is I don't have to have some incompetent installer at my home for any of it.

On the other hand, we do need an adequate high speed internet service. But at this time we high speed internet from Comcast anyway so I wouldn't count it , just as I don't count Amazon Prime as a cost because we would have it anyway. Unless....

...Comcast charges for internet usage volume above a cap. In fact I know they will. It isn't an "if", but a "when" question. Unlike many, I won't begrudge them that because where I live it is a miracle that I have cable high speed internet. Of course, I cannot fairly ignore charges for increased usage caused by a shift to streaming TV. But it appears that these charges will come in extra $10 per month increments which would still keep it cheaper than a satellite or cable TV package.

All this is going to be an interesting ride into the future of TV. Will it be better or cheaper? Who knows?


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## Stewart Vernon (Jan 7, 2005)

I hope this isn't the direction we end up with... Firstly, it means each channel will be more expensive via streaming that it has been as part of the cable/satellite bundle. Sure, if you only want a few channels you might save money... but if you watch a lot of TV, you'll end up paying a lot more... also, you'll likely find some of your content unavailable via this streaming model.

The big networks have traditionally had a hard time streaming the big events... servers overloaded... that might get better over time... but that's just their end... we need better speeds on our end too! And of course the cost of decent enough broadband to actually stream TV online with the same quality as broadcast... and that isn't even available for all customers even if you can afford to pay it.

Ultimately this could kill satellite and cable... except as Internet service providers of course... and it adds flexibility for the consumer... but it might come at the expense of the smaller channels being unable to compete in the streaming market, and costs generally going up for those of us who want to watch more.

Also... for those who think this will "fix" the sports thing of paying for high-prices sports... think again. The networks will still bid on carrying sports, on their streaming channels... and if they bid large, they'll likely bundle that into their cost of service... Want to watch that new Star Trek show on CBS All-Access? Well, you'll have to pay for the CBS cost-of-attaining-rights for NFL games too... whether you watch them or not. So, that'll likely still continue until the bottom falls out of TV entirely.


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## phrelin (Jan 18, 2007)

Stewart Vernon said:


> Also... for those who think this will "fix" the sports thing of paying for high-prices sports... think again. The networks will still bid on carrying sports, on their streaming channels... and if they bid large, they'll likely bundle that into their cost of service... Want to watch that new Star Trek show on CBS All-Access? Well, you'll have to pay for the CBS cost-of-attaining-rights for NFL games too... whether you watch them or not. So, that'll likely still continue until the bottom falls out of TV entirely.


You're right, of course. Moonves isn't going to create any option that avoids paying all the costs for CBS commitments to programming. So I will be stuck supporting sports and reality TV. Unless I stick to Netflix, Acorn TV, and Amazon Prime I can't seem to get around the problem. But when I cancel my Dish service, I do like having access to one Bay Area channel live which CBS All Access will give me.



> And of course the cost of decent enough broadband to actually stream TV online with the same quality as broadcast... and that isn't even available for all customers even if you can afford to pay it.


This is my biggest concern. For most of my community, true high speed internet is not really available. Satellite internet has definite caps and the local DSL company offers an "up to 9.0Mbps download" plan (AT&T basically abandoned us). The few of us who have access to Comcast Cable are the only ones able to seriously consider streaming and we only have it because Comcast got stuck with our system when they shared the Adelphia bankruptcy deal with Time Warner. There are a lot of places in the United States where people can't get high speed internet as we watch Google cherry-pick areas already served to put in their super-duper high speed system. it's very frustrating.


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## Stewart Vernon (Jan 7, 2005)

Just so it doesn't look like I'm all gloom and doom...

If we ever get more affordable high-speed broadband throughout the country, I would likely find streaming more favorable than I do now. I might even subscribe to a few streaming services to get some new/different programming.

But I am one of those people who would end up paying more for less IF the current model dissolves and it all goes pay-for-play on the Internet... because I like a lot of different programming on a lot of different channels... and at the likely cost-per-streaming service I'm seeing develop so far, there's no way it wouldn't cost me a LOT more to buy each service I'd have to buy to see all the shows that I want to watch. At that point I'd have to decide which shows to give up... and this is a danger-zone for TV in general.

Once I decide to give up some shows, I've tipped the scale. I've learned I can live without shows I used to enjoy... and once I get used to missing those shows, it becomes infinitely easier to decide to miss others. It's like music. I own over 300 CDs... but I haven't bought any in decades. Not because I'm stealing music... but because I reached a point where I had to cut back, and I found I could listen to enough free music on the radio that even though I couldn't own and listen to everything, I could hear enough to make me happy essentially for free... and once that bond was broke, I've not been tempted to even look at the CD section.

In recent years I've been forced to part with many DVDs and Blu-rays too. Some I really liked... for financial reasons, I have had to sell even well-enjoyed things... and so, it now is infinitely easier not only to sell more but to not buy any more either... and that's part of where that market seems to be going. Financial crisis forces consumers to choose, and they choose... and don't look back.


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## phrelin (Jan 18, 2007)

Stewart Vernon said:


> But I am one of those people who would end up paying more for less IF the current model dissolves and it all goes pay-for-play on the Internet... because I like a lot of different programming on a lot of different channels... and at the likely cost-per-streaming service I'm seeing develop so far, there's no way it wouldn't cost me a LOT more to buy each service I'd have to buy to see all the shows that I want to watch. At that point I'd have to decide which shows to give up... and this is a danger-zone for TV in general.
> 
> Once I decide to give up some shows, I've tipped the scale. I've learned I can live without shows I used to enjoy... and once I get used to missing those shows, it becomes infinitely easier to decide to miss others.
> 
> Financial crisis forces consumers to choose, and they choose... and don't look back.


That is so true.

While there have always been people who rarely, if ever, watched TV, I think we already have experienced a tipping point that has created a generation of "cord nevers" and the first round of "cord cutters."

The next "tipping point" could result in urban area cord cutting representing 30%± of cable/satellite homes. There is now a broader understanding that a lot of content exists outside a cable/satellite tuner. In urban areas that generally have high speed internet and OTA, folks are going to discover that buying a relatively cheap device like a Roku or Apple TV box along with a basic OTA DVR+antenna is the way to have access to the most content.

I have a feeling that in 10 years within Metropolitan Statistical Areas, the current cable/satellite TV system will have gone the way of copper landlines - still around, but phasing out. Given the rapidly developing ?G wireless options both within wireless phone companies and new options, there will be a revolution in home entertainment options.

This will create a set of divisions in our country that you discuss. One broadening dividing line may be geographic - more rural suburban and rural areas will not have all the service options and in a worst case scenario may not have any reasonably up-to-date service options.

I'd like to see companies like Google become much more egalitarian in their approach to building internet infrastructure - embrace expanding high speed internet service to every building within and beyond those areas identified on this map (click on the map for a large version)...



...but I guess that's just too much to ask for.

Another dividing line may be between those who will be satisfied with a very few content services and those who want access to a wide range of content. Depending of how it all falls out, this could result in less professional-quality content that is more expensive. It likely would result in lower relative income for the day-to-day workers in the entertainment industry which would be consistent with the historical experience of embracing new technology. Somebody always loses.

On the other hand, it all could result in improved signal service options for everyone, even the backwoods hermit, and folks will enjoy the increase in and affordability of content options. This would depend upon a lot on the values embraced by Americans.


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## Wilf (Oct 15, 2008)

I am fortunate that I live in a mostly rural area that has very good broadband service (Atlantic Broadband), but I do pray that Comcast will NOT buy ABB out. While we still subscribe to the Welcome Pack from Dish, we rarely watch it - it is mostly "there" to keep wife happy. We are overwhelmed by all the stuff we want to watch on Netflix and Acorn, and have no desire to subscribe to anything else - we are happy with the way things are. As an old geek, I would have broadband in any case, so streaming had been a huge cost savings.

BTW, the 2050 map fails to show the areas that expected to be underwater - especially Florida !rolling .


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