Skinny bundle trend
Comcast (CMCSA) was asked at the Guggenheim Securities TMT Symposium in New York this month whether the company viewed the trend of skinny bundles as a long-term trend. Comcast stated that it believed that there would be “winnowing” when it comes to the channels included in the skinny bundle.
Comcast believes that many media companies who have multiple networks would be reluctant to sell one or two networks “à la carte,” as they would prefer to earn revenues by selling all channels. The trend of skinny bundles, that is, offering select channels for a low price is increasing. After Dish Network’s (DISH) Sling TV, there are other new players in the market including Sony’s (SNE) PlayStation Vue. Hulu is another player that’s also developing an online television service.
Time Warner (TWX) is another company that has also stated that it would like its networks to be available on each of the new packages.
Rising trend of online television services
As indicated by the rising popularity of streaming services such as Netflix (NFLX), viewers are watching more and more content online. According to a Digitalsmiths 4Q15 video trend report and as the above graph shows, Netflix leads the OTT market with a 48% share, followed by Amazon (AMZN) with 20%.
Hulu, Time Warner’s HBO Now, and CBS’s (CBS) All Access are smaller players in this market. However, with Hulu’s proposed online television service, the streaming market could be set for an upheaval.
Comcast makes up 3.0% of the PowerShares QQQ Trust Series 1 ETF (QQQ). QQQ has 4.4% exposure to the TV and radio sectors.