A physical media retailer asks for help from the film community. TNT’s loss of NBA rights could have serious implications for the streaming JV Venu Sports. The vMVPD that is propping up the industry is declining.
Scarecrow Video asks for help
Seattle’s Scarecrow Video reached out to the film community in an open letter saying it could be forced to close its doors by the end of the year with an injection of $1.8 million. The company, which says it is the world’s largest video library, rents and sells physical media. It converted to a non-profit in 2014.
Looking at DEG data, you might wonder how Scarecrow has survived this long. Back in 2011, physical media sales and rentals were a $14 billion industry. Since then, the industry has seen nothing but accelerating declines. In 2023, consumers spent $1.6 billion on physical media, down 25% from the year before. Is there a bottom to the market? If so, there is no sign it is anywhere near reaching it.
Perhaps physical media will suffer the same fate as vinyl albums and become a niche interest market. I’m betting not, though. It’s more likely to go the way of the VHS tape.
NBA departing TNT
It is looking increasingly like this will be the last season for the NBA on TNT. Though there has been no formal announcement, it’s clear that WB Discovery can’t match the $76 billion 11-year deal reportedly on the table from ESPN, NBC, and Amazon. The game options formerly held by WB Discovery will be parceled out between three bidders, making it certain that a traditional pay TV subscriber will need at least Prime Video, and maybe Peacock, to see if the Celtics can repeat in the 2024-2025 season.
John Skipper, the former head of ESPN, commented:
“The first thing anybody thinks about when you say TNT is the N.B.A.”
Now, what will people think about when you say TNT? WB Discovery is already plotting to take the liberated NBA funds and buy more NHL rights. But it certainly won’t be the focal point for the sport as it was with basketball.
The NBA’s loss raises questions about the value WB Discovery brings to JV Venu Sports. Of course, ESPN still has some NBA games that it can offer. But without the heft that the NBA on TNT would have brought, WB Discovery doesn’t really have much to offer. It also makes me wonder if there is enough value in Venu Sports at all!
Did YouTube TV lose subscribers in Q1 2024?
The announcement earlier this year that YouTube TV had reached 8 million subscribers was a bright spot in the otherwise moribund pay Live TV channel bundle market. Only one other operator in the market – Fubo – reported positive growth in 2023.
In the first quarter, traditional pay TV continued its losing ways, shedding 2 million subscribers, a decline of 3.4% over the previous quarter. In the past, vMVPDs have helped soften the decline in subscribers by picking up some. For example, in 2023, traditional pay TV lost 8.4 million subscribers, while vMVPDs gained 2 million for a net loss of 6.4 million. YouTube TV was largely responsible for the 2 million growth.
In a worrying sign for the vMVPD industry, MoffettNathanson estimates that YouTube TV lost 150,000 subscribers in the first quarter of 2024. The company suggested that the completion of the NFL season could be responsible for the loss. YouTube owns the rights to Sunday Ticket, and YouTube TV subscribers could sign up for a discount. So, it makes sense that football fans might cancel YouTube TV now the season is over. However, the primary driver for vMVPD sign-ups is traditional pay TV cancellations, and they haven’t declined. Does this mean vMVPDs are shifting from growth to decline, too?
