You don’t often hear of an app shutting down. Although I’ve forecast that it would happen in 2023, it’s still a little shocking. Fox has made its mark here, announcing that they have shut down the FOXNOW app. It could be the first of a stream of app shutdowns, and that could be a problem for traditional pay-TV customers.
Defining “provider apps”
In order to understand the concept of provider apps, you need to set your mental clock back to the early 2010s. Back then, most folks got their TV from cable or satellite. Streaming was in its infancy. Networks like ABC, Discovery, and others made their money mostly from the fees they got from pay-TV companies. They realized, though, that they could potentially get even more money by encouraging customers to stream. People who had missed something live could catch up, and the commercials served through these apps were direct sources of profit for them.
Pay-TV companies feared provider apps at first. They thought people would stop paying the cable company if they could get the same programs for less over streaming. (Turns out they weren’t too far off base there.) So, everyone got together and came up with a solution. Pay-TV companies would let their users connect to these apps using their pay-TV logins. In other words, if you had DIRECTV you would log in with the same credentials you used at DIRECTV.com. A small amount of money changed hands between pay-TV provider and the networks as well.
Why provider apps might be dying
Apps like ABC, Discovery GO, and the recently departed FOX NOW were ways for people who had pay-TV to get more content. They specifically didn’t work the way people wanted them to. Cord-cutters wanted to use these apps for free, in order to get network content without a pay-TV subscription. Problem is, that didn’t work. Some people traded user names and passwords, but most people just gave up and started paying Hulu, Peacock, Paramount+. or Max to get that content.
Speaking personally, I don’t use provider apps that much because just like everyone else, I pay for those streaming services. Although, just the other week I watched something on the CW app because my local CW affiliate was blacked out in a fee dispute.
Still, for true cord-cutters, the folks who get TV from an antenna and don’t stream (and therefore, don’t read this article), it’s kind of a loss. I always thought it was a shame that antenna TV users couldn’t use provider apps. It never made sense since you could easily watch those same programs on a PC, but then again who am I to ask, I guess.
It’s all part of the consolidation
That’s really the reason this whole thing is happening. A generation ago there were dozens of media companies. Today, a staggering amount of the video landscape is controlled by Google, Netflix, Disney/ABC/ESPN, Comcast/NBC, Paramount/CBS, and Discovery Time Warner. Six companies control most of the time you spend streaming. Discovery’s Zaslav may say that he is more interested in traditional pay TV than streaming, but don’t believe it. These companies make more money if you subscribe directly than if you get pay TV. They don’t want to make it easy for you to stay with pay TV. They want to make it easy for you to pay them directly.
It’s hard to know right now how much the loss of these provider apps will hurt traditional pay-TV. I just have to scratch my head because honestly these things couldn’t be too expensive to operate, right? Why not leave things as they were? Oh well, what do I know I guess. 😉
