YouTube TV’s announcement has reignited the debate over the viability of the skinny bundle. We take on the debate from different sides, and end up agreeing to disagree somewhere in the middle.
Chapter 1: The YouTube TV offer (1:30)
YouTube TV includes 40 channels for $35 a month. Channels from Disney (ABC, ESPN), CBS (Showtime), Fox (FS1, Fox News), and NBC (NBCsn) are well represented in the bundle. However, many popular channels from Viacom, Scripps, and Time Warner Inc are not. Will and I agree that the offering is the weakest of the skinny bundle providers.
The biggest challenge will be getting all the broadcast affiliates to participate. The service only has rights to broadcast the broadcaster owned and operated stations, which will limit the appeal to a few markets.
Chapter 2: The argument against the skinny bundle (6:00)
Will thinks skinny bundles won’t be successful because there will always be channels people must give up to move to them.
Chapter 3: Why the argument against skinny bundles is weak (10:10)
I don’t disagree that people will have to give up some channels to move to the skinny bundle. However, I don’t believe as many people rely on pay TV for all their entertainment as uses to. Roku users watch over 2 hours a day on their device. For them, individual pay TV channels make up a relatively small part of their entertainment. Giving up a few channels to use a skinny bundle is no big hardship.
Chapter 4: How pay TV is fighting back (17:10)
Will agrees that pay TV is an expensive product. However, he points out that Comcast is positioning itself as an integrator of all video services for its customers. It has added Netflix, YouTube, and Sling TV to the X1 set-top box. The strategy seems to be working as they grow while the rest of industry shrinks.
I point out the bundling of services that operators like Comcast are offering is powerful argument for the continuance of the big bundle. However, that unravels as soon as the special offer that customers signed with expires and the price goes through the roof.
Chapter 5: The role of the aggregator (20:10)
The role of the aggregator is an important one for pay TV operators. But it is not their exclusive domain. Many can fulfill that function, including Samsung, Roku, and Amazon. In the end, Will and I agree that there is opportunity for both approaches to aggregation. However, I believe skinny bundles have a realistic opportunity among those that reject the pay TV operator as their aggregator. And that opportunity is expanding.