The Fox network began live streaming its prime-time programming last night via Fox.com and Fox Now. The service is available on iPhones, iPads, Android, Kindle Fire, Apple TV and Google Chromecast devices.
Describing the service as a "beta" version, Fox will offer it in all 210 US television markets and reach more than 98% of pay-TV subscribers. It will offer simultaneous streaming for all its prime-time shows (other than sports) every night of the week, and include some late-night programming on Saturdays. (See Life, Liberty & the Pursuit of Live Video.)
To my mind, this is very different from the event-based live video streaming that is being increasingly offered via Facebook Live, Twitter and others. Fox is offering all of its most valuable programming online every single day, and at the same time as it is broadcast. That's a pretty big deal for a broadcaster -- to go over-the-top not only of pay-TV providers, but also its own broadcast stations and affiliates.
In theory, this is not a cord-cutting initiative. For now, you have to be a pay-TV subscriber to be able to view the streamed shows, though of course you have the option of viewing them on a number of other devices. And most importantly, you will stream them from Fox-owned web properties, rather than the operators' TV Everywhere services.
Despite the obvious negotiating power that a network has if it is producing top-rated shows, it is dependent on pay-TV providers to get its signals to US homes. A very small percent, less than 10% of all US homes, receive TV signals via an over-the-air antenna. And while cord-cutting is having an impact, approximately 80% still subscribe to pay-TV. Therefore, broadcasters still need pay TV operators, and existing retransmission consent agreements with Fox may even limit what the broadcaster can do.
So today, the broadcaster can't change too much without upsetting a delicate and usually contentious balance. However, what it can do is try and wean users away from the TV and onto the Internet with an eye to the long term. If it can eventually build viewership on its web properties to rival its TV viewers, it can finally eliminate the pay-TV middleman.
It's worth mentioning a recent Wall Street Journal article announcing that Hulu LLC is planning to launch a web-based $40 monthly service for cord-cutters in 2017. Fox is a Hulu parent, along with Walt Disney Co. (NYSE: DIS) and NBCUniversal LLC . A broad slate of broadcast and cable networks, including ABC, ESPN, the Disney Channel, Fox News, FX and Fox's local and national sports channels, have apparently signed on already, and NBC, Bravo, E!, MSNBC, CNBC, Oxygen, Syfy and USA would be brought in by NBC/Universal, currently in talks with Hulu. The Fox streaming service would provide useful information before the launch, not to mention add significant value to the package.
This isn't all that revolutionary a concept: Dish Network LLC (Nasdaq: DISH)'s Sling TV offers a slimmed down package for $20 per month, and Comcast Corp. (Nasdaq: CMCSA, CMCSK) has responded by offering Stream, a minimal cable package, for $15 a month. But it's one more step in a long-standing battle between broadcasters wanting to regain their direct relationship with their viewers, and pay-TV providers wanting to retain their place in the value chain.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation