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Straight Talk Media & Entertainment

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Barely a month goes by without a TV-channel owner announcing plans to start selling its content direct to consumers (D2C) and outside the traditional pay-TV bundle. It’s a logical step for brands widely recognized for owning great shows, such as HBO and Showtime, but a puzzle for others that are spread too wide or too thin.

The catalyst for the a la carte movement, Netflix, has set a pretty high bar. For less than $10 a month, it offers a catalog that sits somewhere between a TV channel and a pay-TV bundle in terms of size, variety, and quality. Given the strength of their brands and content, HBO and Showtime may be able to convince consumers to pay a similar amount.

Many other channels simply don’t carry that weight. They’re either too niche or don’t feature enough top-drawer shows. Even those that do tend to spread that content pretty thin, with repeats showing ad infinitum. As a result, those channels do not have the kinds of brands that consumers would jump at subscribing to outside a pay-TV bundle.

One option would be to aggregate content from several channels under a single brand. But what brand? Often the name of the owners is largely recognized only in industry circles, whatever the marketing team thinks. Creating a new brand isn’t necessarily the answer. Just ask Hollywood how enthusiastically consumers have met their various D2C offerings.

One option would be to stick to the safety of the pay-TV bundle. But owners of knowingly lackluster channels shouldn’t be surprised if pay-TV operators – just like consumers – start to question what they have been paying for all these years.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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