The Rise of Skinny Bundles And How They Could Change Cord-Cutting

The following opinion piece is a guest post and does not necessarily reflect the opinions of this publication. Read more about MediaShift guest posts here.

With the average cable bill sitting at about $100 a month, it’s no surprise that subscriber numbers are falling. People are looking for ways to save on television. Now, up until recently, there weren’t many good options. Sure, there was Netflix, Hulu and other on-demand services, but the truth is that these services don’t meet all the average viewer’s needs. Why?

• While binge watching is more popular than ever, there are some programs that still need to be watched live, such as sporting events, presidential debates, awards shows, etc.
• Many of the on-demand services don’t add content until well after it has aired (sometimes even a year later).
• Content deals vary widely across streaming services, so it can be difficult to know which service will have which programming.

All of this has kept cord cutting from hitting the mainstream, until recently.

Enter the Skinny Bundle

We’re all familiar with cable bundles. You pay a flat fee for a bundle of say, 100 channels. The problem with this idea is that we end up watching only a small handful of channels we’re paying for. As a result, people feel like they’re getting ripped off. And why wouldn’t they?

But a little over a year ago, Dish Network decided to try something new. They released a standalone skinny bundle to be streamed over the internet with no pay-TV contract, called Sling TV. The way their skinny bundle works is you pay a low fee ($20 per month) to stream 20 or so channels. There’s no need for a cable contract. No need for a satellite dish. All you need is internet service and a device to stream with.

Sling TV included powerhouse ESPN in their basic skinny bundle, making it the first legitimate way for people to cut the cord and still watch sporting events like the NBA Playoffs live online without resorting to illegal streams.

While Sling TV was the only such live streaming service for some time, it isn’t the only player in the space any more. Verizon and even Comcast are offering skinny bundles to customers. And not everyone behind the scenes was happy about cable providers messing with the cable bundle status quo. (ESPN, which jumped into streaming with the launch of Sling TV, sued Verizon over it. But it seems they’ve made nice since Verizon made some tweaks to their Custom TV service.) Despite some uneasiness, it hasn’t stopped even more players, such as Dish-competitor DirecTV, from entering the game.

That being said, it’s not just cable companies looking to capitalize on the skinny bundle trend. There have long been rumors that Apple and Amazon will enter the skinny bundle game. And most recently (and perhaps most notably), Sony released their streaming service, PlayStation Vue, nationwide. It’s the first direct competitor Sling TV has had so far, and it’s looking pretty enticing.

Although Vue’s smallest bundle contains over 50 channels, they’ve managed to keep the price down at $30 per month. The only real hindrance they face at this point is their lack of device support (you have to either have a PlayStation or Amazon Fire TV to get the service). On the other hand, Vue offers a cloud DVR and multiple streams, both of which Sling TV lacks. It will be interesting to see if Sling makes any changes in response.

Why Can’t We Just Buy Channels A La Carte?

Many wonder why we can’t just create a system where you pay for the channels we want to watch and nothing else. Unfortunately, it’s not that simple. While premium channels like HBO are offering up their content in standalone services, chances are most networks will not.

“The problem with a la carte channels is that customers think that of their 100 channels, they’d pay just 1/100th of their bill for that single channel,” said David Gonos of tvUPstream.com. “What they don’t realize is that single channel is probably one of the most popular channels, and the others are throw-ins at cheaper amounts. So if they want a la carte channels, they’ll have to prepare for the fact that ESPN might cost 20 times that of the Hallmark Channel.”

Even HBO, with its HBO Now service, is still making itself available as an add-on to bundles in streaming services like Sling TV (which is great, because you have multiple legal options to watch their top-tier programming like Game of Thrones).

That being said, odds are we won’t be seeing a truly a la carte pay-TV system any time soon.

Are Skinny Bundles the Future of Television?

Maybe. With so many major players jumping into the ring to offer their version of a streaming skinny bundle, it sure seems to be the way things are heading. However, it’s possible that there will be more changes ahead.

Gonos believes “we’re in the middle of a massive transition – and we’re not even close to seeing how things will eventually pan out.” The industry watchdog noted that “Cable TV was essentially the same from the late ‘70s until the ‘90s when small-dish Satellite TV entered the game. But even after that, Cable TV hasn’t seen the change it’s about to see in the next five years.”

Whatever the case may be, you have to think Big Cable won’t go down without a fight. Sure, they’ve shown they’re willing to offer cheaper bundles, but they’ve got to make up their profits somewhere. The question is how? My bet is they’ll look to make up losses through data caps on internet service.

You have to remember that the same people who provide cable TV also typically provide you with internet service. And some of them are already testing data caps on internet service in certain markets. It’s obvious that these caps are aimed at those who use large amounts of data to stream their television. Much like with wireless data plans, once customers hit their data limit, they’ll be charged for data overage.

So what can we do about it? Let your voice be heard. If you’ve been affected by the data caps, file a complaint with the FCC. Take to social media and express your opinions. Spread the word and make sure that as many people as possible know what’s going on, and Big Cable will be forced to listen.

Chris Brantner is the founder of CutCableToday.com, a site dedicated to helping people find inexpensive, legal options to traditional pay-TV. Follow him on Twitter @CutCableToday.