If It Ain’t Broke, Don’t Fix It

Sling TV announced a ‘revolutionary’ new interface this week. Are you sitting down? This amazing new innovation is – wait for it – a grid guide. Really?

What does this move tell us about the current state of broadband pay-TV offerings and the future of TV? Two thoughts.

1. There Is Only One Pay-TV Market
Businesses don’t like to cannibalize themselves. More precisely, businesses really don’t like to admit that they are cannibalizing themselves. Levi’s sells (basic) jeans on its own website and at department stores like Macy’s for $40-$60. At the same time, Levi’s sells (basic) jeans at Walmart for $20. How do they justify this obvious price discrimination? In this case, the resident marketing geniuses created a secondary low-priced brand specifically called – wait for it – “Signature by Levi Strauss & Co.” Amazing, no?

In the case of pay-TV services, companies twist themselves into knots trying to persuade consumers (or maybe just themselves?) that their (cheap) broadband pay-TV services are totally different than their (expensive) legacy offerings. With respect to Dish Network, these contortions included launching a broadband pay-TV service (i.e., Sling TV) that offered linear channels but did not actually include a grid guide that let you see what was on a particular channel at a particular time.

Consumers are not fooled by any of this. People sign up for Sling TV because they want a pay-TV service for which they don’t have to pay full price. Once these users started plunking down their credit cards and paying for the service, however, they discovered that you couldn’t actually figure out what was on TV. This is a bit of a problem, and a good number of them seem to have complained. The most unintentionally funny part of Sling TV’s blog post announcing the interface fix is its apparent surprise that the two most requested features for the Sling TV service are a DVR and a grid guide. (I guess that’s why those marketing folks get the big bucks!) I guess pay-TV customers want basic pay-TV features as part of a basic pay-TV service. Go figure!

The bottom line: Consumers don’t care about meaningless distinctions. There is one pay-TV market and broadband alternatives compete directly with legacy offerings based on price, content, and features. The rest is nonsense.

2. Innovation For Innovation’s Sake Doesn’t Work
In the 1980s, car companies fell in love with digital dashboards. Was there anything wrong with conventional dashboards? Absolutely not. Designers just decided that the existing designs were boring and needed to be scrapped for something out of a storyboard for Tron. This fad eventually burned itself out and car dashboards reverted to a boring sameness that has remained largely unchanged until today.

I fear that the same temptation exists among designers of TV apps. This is not a defense of grid guides. Personally, I can’t stand them. Netflix appropriately abandoned any notion of a grid guide and replaced it with a simple ‘cover art’ approach that has served the SVOD service well for years.

My point is simply that user expectations and basic functionality both matter and cannot simply be chucked aside at the whim of a designer. In practice, this means that the new crop of broadband pay-TV services need to pretty much all work alike, and in doing so cannot deviate too far from the existing legacy pay-TV and SVOD services that people are already know and use. Anything else and the user will end up frustrated with the service and likely not hang around for long.

Sling TV’s re-introduction of a grid guide may seem like one step forward and two steps back for innovation in the pay-TV industry, but the implications are clear. Whether the industry likes it or not, consumers expect broadband pay-TV services to look, feel, and behave like legacy pay-TV services – only better and for a cheaper price.

Stick with TDG and stay ahead of the curve.

Joel Espelien is Senior Advisor for TDG and VP of Client Services for the Corum Group doing sell-side technology acquisitions. He lives near Seattle, WA.