View this email in your browser

Issue 4: January 27, 2020

With PlayStation Vue officially closing down this month, many industry observers are left wondering who will fill the void. YouTube TV appears to be stepping up, but increasing carriage fees means we can probably expect another price increase from the company this year or into early 2021. Can cord-cutting services continue to survive price increases? Is another streaming service failure coming down the pipeline? Read on to find out more in this week's Stream Report.

.Interested in sharing Stream Report with a friend? Send them here!

Streamer's Spotlight: PlayStation Vue's Demise Could be Blood in the Water

Last year, Charter/Spectrum's CEO Jonathan Rutledge acknowledged that the company was quickly bleeding pay-TV customers who were fleeing due to increasing cable TV prices. And while he placed some blame on streaming services and free options (such as those we talked about last week), he also pointed to increasing carriage fees. "Customers don't know where the price increase is coming from, and they attribute it to us," he said,

as quoted in Hollywood Reporter

.

The increasing demand for higher carriage fees is crippling for a traditional cable TV or satellite TV model. By packing in the channels, such services make more money. But when carriage fees increase, those large bundles start to get fairly pricey. Consumers have alternative options now with cord-cutting services. But those cord-cutting services are also impacted by those same carriage fees, which has resulted in the price increases we've seen as of late.

This begs the question, though. Can cord-cutting services survive when prices continue to rise? PlayStation Vue's demise likely had more to do with branding, but the service also had some of the highest prices in the market for live TV streaming. In an age of ever-increasing carriage fees, how can legal IPTV survive? 

Cost vs. Value

TV viewers are always going to weigh the cost of service against the value it provides. This is why there's a market for cord-cutting "skinny" bundles in the first place. Consumers were tired of paying $100+ for 150-200 channels when they only watched a quarter of those. And why not pay a quarter of the price for a quarter of the channels?

Cord-cutting services can survive the carriage fee increases so long as they continue to offer a better value for the price. So long as traditional cable and satellite TV providers keep pushing large bundles with high fees, hidden fees, and long-term contracts, cord-cutting options can win even at prices higher than they're currently charging. 

The Breaking Point

So what is the breaking point for cord-cutting services and price increases? There likely isn't one, exactly. If services like YouTube TV and Hulu with Live TV are raising prices, that also means their traditional cable TV competitors are, too. The problem comes where they're able to get sustainable revenue. 

Cable TV providers often bundle internet and TV together. Internet plans tend to be far more lucrative with much less overhead. Alongside increasing prices, traditional services can help prop up their flagging cable TV services by sweetening the deal with internet discounts (as most do for those bundling). 

Cord-cutting services don't have many options on this end. For their part, Hulu and fuboTV's add-on packages for more simultaneous streams and DVR storage help boost their thin streaming profits. But many other providers, like YouTube TV and Philo, aren't into the add-ons game. 

Ultimately, the breaking point for services may be the inability to generate enough revenue to sustain themselves in the face of user discontent over higher prices. The result will likely be a further thinning of the market as more services go the way of PlayStation Vue. 

Which Service Will Be Next on the Chopping Block?

Considering it's been losing customers at a fast clip, the next service likely to go belly up in this market is AT&T TV Now. The company notably

lost over 700,000 customers

in 2019. That comes with a caveat, however. AT&T plans to change up this service in 2020 and roll it into a new one they've been developing. So while AT&T TV Now is certifiably going to disappear sometime in 2020, AT&T isn't quite out of the game quite yet. 

This Week's Streaming Guide

1. 'Harry Potter' Star Daniel Radcliffe Leads in TBS' "Miracle Workers: Dark Ages" Season 2

Star British actor and

Harry Potter

alum Daniel Radcliffe plays a leading role in Season 2. Available Tuesday on TBS. -

F

lixed

2. 'Ragnarok' Comes to Netflix this FRIDAY

A small Norwegian town may be experiencing the beginning of a new Ragnarok --- unless someone can stop it, that is. Available on Netflix this Friday. -

Netflix

News and Industry Developments

1. YouTube TV Officially Replaces PlayStation Vue on the PS4

The YouTube TV app is officially available on PlayStation 4 (and PlayStation 3) consoles. -

The Next Web

2. What's Coming to Disney+ in February 2020

Disney is dropping some new content next month. Here's a full listing of what's up next. -

Lifehacker