In 1992, Bruce Springsteen sang of 57 channels on but nothing to watch, writes TalkTalk's Will Ennett. Fast forward to 2018 and there are now hundreds if not thousands of channels to watch on cable and satellite platforms around the world, but viewers typically only gravitate to a select number of quality providers of content.
Frequently, customer surveys cite (in my personal experience, in any case) that customers are happy to pay for content they value, but really dissatisfied about paying for channels and content they DON’T watch.
This trend among customers to only pay for what they want is verified by a growing trend for ‘skinny bundles’ around the world; not only low-priced OTT services globally, but collections of traditional pay TV bundles slimmed down and focused to the audience.
This is particularly prevalent in the US, where skinny bundles include DirecTV Now, Playstation Vue, Philo, Fubo TV and also the likes of Hulu and YouTube TV. These are often but not exclusively aimed at younger audiences, or ‘cord-shavers’, those looking to reduce their spend on TV content.
At TalkTalk, in the UK market, we have launched our own version of the skinny bundle in the last year. We called this TV Select; 14 of the best pay TV channels in the UK, covering drama, comedy and entertainment.
Skinny bundles however aren’t just simply about solving the issue of too many channels, nothing to watch – they tap into modern customer expectations of how a product is sold. Available on customer’s terms, ubiquitous access, and of course, with such strong competition for the audience’s leisure time from an array of pursuits including gaming and books, great value for money.
Starting at the most important element, the content, what categorises many of these bundles is their ability to aggregate content typically behind high barriers of pay TV, and make them more readably accessible.
In the case of TalkTalk’s TV Select package, this includes the top 6 most watched pay channels, and 9 of the top 20, most watched pay channels in the UK. We have concluded deals and worked with a selection of the best pay channel operators in the UK, including Sky, Viacom, FOX, UKTV and A&E. Content highlights from Sky channels include strong international series such as Elementary, Modern Family and Arrow, as well as local hits including Lucky Man. We built a strong relationship with FOX group and added both FOX channel, home of the Walking Dead, as well as National Geographic. Viacom is represented by both MTV and Comedy Central. We collaborated with A&E to bring History and Crime+Investigation to the package. UKTV have provided GOLD and GOLD+1, home of classic UK comedy including Blackadder, Only Fools & Horses and Fawlty Towers. Finally we added one of the more recent channel launches in the UK, Viceland, targeting a younger demo with content including It’s Always Sunny in Philadelphia, That’s Delicious and Most Expensivest.
Looking at the skinny bundle trend, a common theme is that customers pay for content on their terms. So unlike traditional cable and satellite providers who lock you in to long term contracts, skinny bundles like the ones TalkTalk and provide are on a rolling 30-day contract where you can cancel any time. If you’ve ever tried to cancel with a traditional provider, you’ll typically have to call up and go through a gruelling Also, the ability to cancel without the typical pay TV requirement of calling up and being strongly induced to stay is a big pain point for customers and often missing. You will notice with newer OTT entrants like Netflix that cancelling is not a simple matter of clicks and not convoluted; this is usually replicated in skinny bundle merchants.
Customers can also access these offers across a host of devices. A commonality is using streaming over the internet in place of more expensive satellite distribution, these providers’s apps are available across devices and often not even with a set top box. Either way, usage across devices and utility are really important features expected by customers.
The skinny bundle doesn’t just serve to give customers the best of what they want to watch, the price point also attracts audiences. In the US, such skinny bundles are in the US$20-US$40 range, comparing very favourably to traditional US$100+ per month bills. TalkTalk’s TV Select is £7 per month, or just 23p a day, to cover well over 95% of the most watched content in the UK.
These skinny bundles are taking risks, but overall strategically well-placed for the future. Customers are increasingly tired of astronomical TV, phone and broadband bundled bills. New services which give customers content at a price point they like and on terms they love, and solve for the decades-old problem of too many channels and nothing to watch, are well positioned.
Will Ennett is head of PayTV at TalkTalk