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The Bloated Bundle: Today's vMVPDs Are Anything But Skinny

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Have you checked out skinny bundles lately? They’re not that skinny. These bundles need to go on a diet.

Now that we’ve been living with virtual multichannel video programming distributors—or vMVPDs, or skinny bundles—for a while, I think it’s time to check in and see how they’re doing.

A little refresher: In the years before streaming took off in a mainstream way, we dreamed about what the perfect skinny bundle would look like. Some of us hated pay TV, while others hated pay TV bills. Streaming would save us, we thought. Some savvy operator would create what we all wanted—15 top channels for $35 per month—and we’d make that operator rich while saying sayonara to pay TV (and saving perhaps $100 per month).

Well, it’s been years. Is pay TV dead yet? Nope, not even close. And we’re not saving any money either.

One reason is that skinny bundles haven’t lived up to expectations, so few households are signing on. People are afraid to cut the cord and want to know that they’ll still get their local channels. They’re afraid that if they switch, their entire TV experience will change. None of the skinny bundle providers do a good job of letting people know what local channels they’ll get in their area. It’s there on the website somewhere, but people have to dig for it. For households used to the one-stop shopping simplicity of pay TV, that’s too much to ask.

The other reason skinny bundles haven’t taken off is that they aren’t skinny, and their price tags keep increasing. Hulu + Live TV goes for $45 per month and includes more than 65 channels. YouTube TV goes for $50 per month and offers more than 70 channels. AT&T TV Now (fka DirecTV Now), which started out with a confusing three-tier plan, now has a confusing two-tier plan. One offers more than 45 channels for $50 per month; the other, more than 60 channels for $70 per month.

No one asked for this.

These services frequently raise their prices. When OTT services approach pay TV pricing, as some do already (I’m looking at you, AT&T TV Now), households have less reason to switch.

And then there are the channel selections. We all know the basic 15 channels we want, and none of them are Freeform, MyTV, or FXM. Providers seem to think they need to offer several channels for everyone in the family, which means multiple sports, kids, news, and niche interest channels. Please, leave these also-rans to add-on packs and let us create our own bundles.

For another take on this, I spoke to Seth Van Sickel, VP of operations with Sling TV. There’s a little bloat at Sling as well, but it’s done better than most at holding down costs. Its two base packages (Orange and Blue) go for $25 per month each or $40 together. One offers more than 30 channels; the other, more than 40.

“When you re-create the packages of traditional TV you also pay the price of traditional pay TV,” Van Sickel says. “And that’s certainly not what people were looking for when we originally launched Sling, and that’s not what we believe people are looking for today.”

What about Sling TV’s own channel bloat? I’m looking at channels like MotorTrend, AXS TV, and ID, which I don’t think have any place in a basic package. Van Sickel says Sling is able to offer some of these less-popular channels without increasing consumer costs, and consumers appreciate the extra choice. I disagree: How would any viewer know how much a channel costs? They’ll assume that every channel is making their monthly bill a little bigger. Trim out the unpopular channels, even if they don’t cost anything, and offer a stronger base.

But whatever the case, we agree that skinny bundles need to be an alternative to pay TV, not a digital double.

“I think there’s danger if everyone sets out to re-create traditional TV,” Van Sickel says. “If all of us re-created traditional television, then I think we’ll quickly become traditional television.”

[This article appears in the July/August 2019 issue of Streaming Media Magazine as "Is It Time to Retire the Phrase ‘Skinny Bundle’?"]

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