EL SEGUNDO, Calif.—DirecTV said it is breaking the traditional cable bundle by launching three new Genre Packs and two new Mini-Pack Add-ons.

These new streaming options continue the company’s push towards skinny, less expensive bundles and are designed to complement the launches of MySports in January and MyFree DirecTV in November.

Genre Packs and MyFree DirecTV are available starting Feb. 27 through directvstream.com and will be available through device partners and directv.com in the coming months.

"At DirecTV, we're breaking up with the one-size-fits-all bloated cable bundles of the past by delivering new ways for consumers to enjoy the content they love at the best value. Our new Genre Packs and Mini-Packs provide lower-priced options, allowing customers to pick and choose what they want to watch and when they want to watch it," said Vince Torres, chief marketing officer at DirecTV.

Building on the launch of MyFree DirecTV and MySports, the industry-first sports-centric pack, DirecTV’s new Genre Packs include MyEntertainment, MyNews, and MiEspañol. All three are available to enjoy satellite-free on popular streaming platforms starting at $34.99 a month. Consumers of any Genre Pack will also gain access to 100+ channels available through MyFree DirecTV.

DirecTV described each of the packages as follows:

• "MyEntertainment gives consumers access to more than 40 channels filled with movies and shows from popular networks like A&E Network, Bravo, Discovery, E!, Food Network, FX, Freeform, FYI, HGTV, Lifetime, Oxygen, Syfy, The HISTORY Channel, TLC and Vice TV, as well as the inclusion of the Disney+, Hulu Bundle Basic. DirecTV plans to add Max Basic with Ads soon at no additional cost. MyEntertainment is available for $34.99/month.
• MyNews delivers comprehensive coverage of U.S. and global news from more than 10 national channels and select local channels where available, including CNN, CNBC, FOX News Channel and MSNBC. MyNews is available for $39.99/month.
• MiEspañol offers an impressive lineup of more than 60 channels showcasing the best in Spanish-language programming, featuring ESPN Deportes, FOX Deportes, Nat Geo Mundo, Telemundo, and Univision. DirecTV plans to add ViX Premium with Ads soon at no additional cost. MiEspañol is available for $34.99/month."

The new bundles are in addition to MySports, which launched in January. It caters to sports enthusiasts with more than 25 channels including fan favorites like ACC Network, ESPN, ESPN2, FS1, Golf Channel, SEC Network, TNT, USA Network, major league and college conference networks, and starting today, now includes ESPN+ at no additional cost. MySports is available for $69.99/month.

DirecTV also reported that Genre Pack customers can add even more content with the lunch of two new Mini-Packs—MyCinema and MySports Extra.

MyCinema features classic films, romance, and family programming from seven channels, including Great American Family, SONY Movies, and Turner Classic Movies. MyCinema is available to MyEntertainment, MyNews, and MySports customers for $9.99/month.

MySports Extra delivers several sports channels, including MotorTrend, NFL Red Zone, and Willow TV. MySports Extra is available to MySports customers for $12.99/month.

DirecTV plans to launch a MyHomeTeam Mini-Pack offering select regional sports networks in time for MLB opening day on March 27. It did not provide pricing for that upcoming offering.

Not too long ago, streaming was an emerging technology. Today, it’s the norm. In fact, cord-cutting isn’t just growing, it’s accelerating, according to the latest eMarketer data. But that means that the larger transformation toward connected TV (CTV) is no longer being driven by technology companies, nor is it being driven by media companies, many of which are scrambling to build their own direct-to-consumer platforms. At this moment, and throughout 2019, consumers will be in the driver’s seat. Here’s what that means for CTV.

The CTV revolution will be ad-supported

A funny thing happens when you cut the cord. At first, you can buy anything, but as most consumers discover, what they’re really doing is rebuilding their old bundles, with some modifications, of course. The reason is simple: everyone wants to experience as much of the second golden age of television as they can. But unlike the first golden age, household budgets mean consumers have to make choices as they rebuild their bundles.

With the exception of Netflix, you can bet that just about every streaming service out there, including the ones that will launch sometime in 2019, will subsidize subscribership with advertising. In fact, Hulu already offers advertising subsidies, and the company’s success with its $5 student bundle (which includes Spotify!) will certainly mean that the next generation of subscribers will be looking for a subsidized deal. Likewise, it would be very strange for Amazon not to turn to ads at some point, given the $2.2 billion dent the company made in the advertising business in 2018.

Bottom line: the skinny bundle that helped companies like Sling TV grow, isn’t economically viable—not without advertising subsidies. Eventually, as competition among streamers gives way to consolidation, we’ll see a reality check on the cost of an ecosystem teaming with premium content choices. Or put another way, as consumers continue to demand nearly unlimited choice at low prices, the only thing that will keep CTV viable is advertising.

But advertising won’t look like advertising as we know it

Direct-to-consumer brands are eating away at the biggest traditional advertisers, thanks to first party data. In fact, as first-party data capabilities grow, there’s even a new mantra in marketing to fire the CMO and replace them with a chief growth officer. After all, if you have enough first party data, you’re really only trying to solve two challenges: sales and attribution. Those challenges are tailor-made for CTV.

Direct-to-consumer brands are already experimenting with CTV, but as traditional advertisers fight back, their efforts won’t look the carpet-bombing ad blitzes of the legacy model. Instead, they’ll either buy as much third-party data as they can, or they’ll simply buy the direct-to-consumer upstarts, just as Unilever did when it acquired Dollar Shave Club. Or, if they can’t do it through acquisition, they’ll do it through imitation, just as P&G’s Gillette brand did with its on-demand razor service. But regardless of strategy, the writing is now on the wall for television. In 2019, direct-to-consumer advertising will begin to become the norm on CTV.

But will I still see the same ad over and over again?

It’s absolutely true that any consumer who has ever watched more than an hour of streaming TV has run into the annoyance of being hit over the head with the same—often totally irrelevant—ad at every single commercial break.

Initially, advertisers bought CTV as an add-on to their traditional buys. As a result, they weren’t worried about unduplicated reach because the streaming audiences were small, and the advertisers were still running the legacy playbook of carpet-bombing their audiences in the hopes that they’d hit their target. But as advertisers shift to a data-driven approach—whether they’re direct-to-consumer brands using first party data, or traditional brands using third-party data—solving the unduplicated reach problem becomes imperative. After all, the name of the game is to narrowcast your message, not broadcast it.

From both a sales and technology standpoint, the pieces are now in place to solve the unduplicated reach problem in 2019. That’s good news for advertisers and broadcasters, but it’s even better news for consumers. Because what’s at the heart of the CTV revolution isn’t a better way to deliver ads. The heart of the CTV revolution is a better consumer experience, and that’ll be the big story of 2019.

MONTEREY, CA–Cable and satellite TV providers continue to shed subscribers as the rate of cord-cutting accelerate in the third quarter, according to several new research reports.

According to MoffettNathanson, more than 1 million viewers severed their subscriptions to cable and satellite TV services in Q3, the most ever in a quarterly earnings period. The four largest U.S. pay-TV providers--AT&T (DirecTV), Comcast, DISH and Charter lost 887,000 subscribers in the quarter, with the satellite TV providers taking the brunt of the loss.

Media Research firm Kagan released similar figures, noting that cable lost 1.1 million subscribers year-to-date so far, their worst performance at the three-quarter mark since 2014. Satellite providers lost 726,000 subscribers in Q3 and traditional telco subscriptions fell by 94,000, with Verizon alone shedding 63,000 subs alone during Q3. The current number of multichannel video program subscribers stands at 91 million, including 88.2 million residential customers, according to Kagan.

Kagan’s quarterly analysis now includes total virtual multichannel subscriptions from services such as Sling TV, DirecTV Now, Hulu with Live TV, YouTube TV and PlayStation Vue. The combined virtual platforms gained an estimated 2.1 million subs in the trailing 9 months, compared a decline of 2.8 million in the traditional segment.

Leichtman Research Group reported a loss of approximately 975,000 subscribers for the pay-TV market in Q3 compared to a pro forma loss of 410,000 in Q3 2017. Among “skinny bundles,” LRG focused on those provided by AT&T/DirecTV and DISH, noting that its Sling TV and DIRECTV NOW services added only 75,000 subscribers in Q3, compared to about 530,000 net adds in Q3 2017. This was the fewest in any quarter since their debut.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. noted the danger such trends mean for DBS providers in particular.

“Satellite TV services had more combined net losses in 3Q 2018 than in any previous quarter,” he said. “These net losses were largely driven by corporate strategies focused on acquiring and retaining more profitable subscribers (as well as a programming carriage issue between DISH and Univision). A related emphasis on improving the profitability of the satellite TV company’s Internet-delivered flanker brands reduced net quarterly adds in the segment, resulting in vMVPDs not helping to mitigate overall pay-TV losses to the degree they had in recent quarter

In addition to lost subscription revenues, cord-cutting is hitting pay-TV’s advertising base as well. eMarketer recently downgraded its TV ad revenue estimates for 2018, decreasing the rate of growth to just .5 percent to $71.65 billion, down from the previously estimated $72.72 billion. eMarketer predicts that TV’s share of total media ad spending in the US will drop to 34.9 percent, and is expected to fall below 30 percent by 2021.

MOUNTAIN VIEW, CALIF.—The Wall Street Journal is reporting that Google and CBS have reached a deal to include CBS Network content on Google’s planned skinny bundle channel. This new streaming package, which Google is eyeing for an early 2017 release, would launch under the YouTube umbrella.

The deal with CBS will allow the Google channel to carry CBS’ main programs, as well as content from CBS-owned CBS Sports and entertainment cabler Pop. In addition, Google is reportedly in talks with 21st Century Fox for carriage of the Fox broadcast network and its cable channels, which include FX, Fox Sports and National Geographic.

There are also apparently talks with ABC | Disney and NBC, though those are not as far along. The WSJ’s report indicates that Google could decide to launch without NBC if necessary to get its package out ahead of similar offerings expected from Hulu and possibly Apple.

For the full story, check out the Wall Street Journal’s report.

BOSTON—The creation of the “skinny bundle” by pay TV operators, TV packages composed of selected channels targeted at a specific customer segment, is aimed at getting younger viewers to sign-up for pay TV rather than cut the cord. However, according to a recent survey from Altman Vilandrie & Company, a problem area has arisen – skinny bundles aren’t just appealing to new pay TV customers, but the older, established ones as well.

The survey reports that two-thirds of older consumers believe they are wasting money on channels they do not watch. And while those in the 18-24 age group are still the most interested party in skinny bundles, the threat of having older customers also switch to them looms.

“The surprising level of dissatisfaction with unwanted channels we found among older subscribers shows the difficult balancing act skinny bundles create for pay TV providers,” said Jonathan Hurd, Altman Vilandrie & Company director. “It is critical for providers to design optimal bundles that maximize adoption of new subscribers while simultaneously limiting appeal to existing customers—no small task, based on simulations we’ve run using the survey findings.”

A contributing factor to the possibility of older customers making a move to skinny bundles is that they do not watch as much online content as the younger generation. Younger viewers frustrated with pay TV are more likely to go with online sources like Hulu or Netflix, but for those aged 55 or older, only about 30 percent watch TV shows or movies online weekly, meaning most could look to address their frustration with pay TV services by downsizing to skinny bundles.

Additional findings from the survey include that 13 percent of online video consumers “borrow” another person’s account for at least one paid online video service. Also, TV Everywhere hasn’t gone anywhere, as only 36 percent of respondents are aware of the service that allows for viewing pay TV content from mobile devices, the same as in 2013.

To see the full findings from Altman Vilandrie & Company’s report, contact Jonathan Hurd at jhurd@altvil.com.

BRISTOL, CONN. & NEW YORK—After initially filing a lawsuit against Verizon, ESPN has announced that the two sides have come to a settlement over Verizon’s proposed skinny bundle package. Terms of the settlement are confidential and will not be disclosed.

In April 2015, Verizon announced a Custom TV package that would let subscribers personalize their programming by selecting what networks they wanted. ESPN, NBC Universal and Fox Sports objected to the package. Disney, ESPN’s parent company, then filed a breach of contract suit against Verizon in the Supreme Court of the State of New York.

“We have a long-standing relationship with Verizon,” said Sean Breen, senior vice president, affiliate sales, Disney and ESPN Media Networks, in the company’s press release. “We look forward to working with them to provide great content to consumers for years to come.”

Verizon Vice President of Content Strategy and Acquisition, Terry Denson, echoed that sentiment, saying, “We look forward to further collaborating with them to deliver customers content across all of our platforms.”