“Spulu” Edges Out Sora as the Story of the Week

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(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry. Please subscribe.)

I’ll be honest with you, this week it got contentious at the Entertainment Strategy Guy headquarters debating what should be the story of the week. One person (my editor) thought OpenAI’s Sora announcement was the story of the week. Others (me) thought “Spulu”, the new joint streamer—that was announced two weeks ago, stepping on my previous Most Important Story of the Week column on Amazon’s ad-tier—deserved the top spot. 

You’ll see what I went with next. (But don’t worry, I’m writing about the runner-up topic for The Ankler, so look for that later this week/tomorrow.) We had a plethora of interesting strategy stories to choose from over the last little bit, so also expect some of my thoughts on Disney’s epic deal with Epic Games, media layoffs, my favorite business strategy tool of them all, and more. Overall, I’m happy I have this strategy column back to a regular (every two weeks) schedule.

For those wondering, yes, I did announce that February is my big “EntStrategyGuy’s 2023 streaming viewership recap” and that’s still on track. I don’t like to write about the same thing over and over and over again—since I think it bores my readers, not to mention me—so I’ll be back next week with the next round of articles.

Most Important Story of the Week – Spulu: Fox, Warner Bros. Discovery and Disney’s Mysterious New Sports Streamer

Yep, Spulu is the story of the last two weeks. (I’m calling this joint streamer that until it gets an official name. I saw someone use this phrase on Twitter—sorry I didn’t save who—and frankly it’s perfect.) 

It’s not every day we get a brand new entrant into the streaming wars. This new streamer/skinny vMVPD could join the ranks of top streamers, and one who could join the ranks of top streamers the day it launches.

From a strategic standpoint, this new streamer is probably the biggest acknowledgement from traditional Hollywood that the linear bundle’s days are numbered. The question has always been how Hollywood can navigate that shift while not also irritating linear TV providers. Spulu is their latest attempt to manage that shift.

Overall, I like this strategy, with a caveat. While Spulu will have elite content (sports!), its pricing could be prohibitive. ($40 or more dollars?!?!?) It will also face some challenges (piracy for one; antitrust for the other), but has some intriguing upsides (the first step to a new bundle?).

In other words, the strategy could work, but it is entirely execution dependent. In general, we probably underrate “execution” when it comes strategy decisions, and even smart strategic moves can fail because the companies can’t pull them off. So let’s explain why I like the strategy, but the potential pitfalls. And to do so, we’ll use one of my favorite strategy tools…

Why I Like the Move: It Has a Compelling Positioning in the Streaming Market

The Harvard “Marketing Framework” might be my favorite business strategy tool. Abbreviated to the “3Cs-STP-4Ps”, I don’t have time to explain it all today, but in a nutshell, once a marketer understands the business situation (the 3Cs), they then identify potential market segments, their preferred target, and how they’ll position their product (the STP).

While designed for consumer packaged goods—for those who don’t know, think cereal boxes, potato chips and other things you buy at the store—it works fairly well for streaming too. For instance, in this case, the folks behind this joint venture clearly believe something along the lines of (using the traditional “STP” positioning statement)…

“For the casual and hardcore sports fans who have cut the cord, Spulu will provide the most valuable sports content in one place because of the combined licensing rights of Fox, WBD and Disney.”

And yeah…that’s an okay pitch to that segment. Only Paramount and NBC-Universal are left out, and that means some NFL games, NFL Sunday Ticket, the Olympics, some college football games, and all the local sports broadcasts. (Though local sports rights are currently a mess as Bally Sports faces bankruptcy.)

After a company figures out their positioning, the next step is to align their offering using the “4Ps”: product, pricing, placement and promotion. In streaming, I add a “P” for packaging, meaning UX, which some frameworks incorporate anyways:

  • Product (Content): Content-wise, you’ll have nearly every nationally televised NBA, NHL and MLB game, which should be satisfy most casual sports fans. (The press release announcing this deal claimed it’ll have 85% of the live sports market.) You’ll also get a lot of NFL games (though not every game) and nearly all major college football games too. Add it up and, for a casual fan, this provides all the sports of a linear TV package, except, crucially, local teams. (One report also said non-sports live programming would also be included, which would make this a “skinny bundle” of sorts.)
  • Packaging (UX): This streamer will also have a lot of sports in one place. Many sports fans don’t watch just one game in the middle of the day on, say, a Saturday or Sunday. They switch around to watch the better game. On streaming, that’s tougher to pull off compared to linear TV. This new streamer makes it much easier.
  • Placement (distribution): Given that three major streamers are behind this effort, the major bundlers like Amazon, Roku, Google and Apple will likely have to carry this streamer or face customer pushback. So distribution shouldn’t be a problem.
  • Promotion: If we’re ranking traditional and Big Tech companies by their ability to market, I’d put Disney and WBD in the top three with Universal. In other words, when the owners of this joint venture decide to market this product—assuming they get the campaign right—they’ll be able to put out the message loud and clear.

Tying the “Ps” back to the positioning, so far everything makes sense. Casual and hardcore sports fans will have a lot of sports in one place. So what could go wrong?

What Worries Me (And Everyone Else): The Price Tag

Most folks already know about the big hurdle facing this new product. And that is the “P” I haven’t mentioned yet…

  • Pricing: Since the joint streamers won’t want to upset their linear distribution partners, the price of this new streamer will match what customers pay for cable. In other words, if most cord-cutters cut the cord to lower costs, this deal likely won’t help. We don’t know the actual price and most speculation has it at a minimum of $35 and upwards of $50 per month. That’s nearly a full cable bundle subscription. No matter how good the content, for many cord-cutters its still too pricey. (And piracy will remain the better option, see next.)

Arguably, “cord-cutters” are the most price sensitive customers of them all. Meaning, if a customer cut the cord—at least early generations—they did so to avoid huge, cable-like fees. If you want to criticize the positioning statement, this is where you’d do it. If a customer hasn’t cut the cord, I doubt this sports offering makes a difference.

Three Other Worries: Privacy and Joint Ventures

Three other (big) things worry me and could likely hold this new streamer back.

  • Piracy: As I wrote last issue, I should mention piracy every chance I get. I am fairly convinced that a large (potentially huge) number of cord-cutters get illegal streams of any game that they want to watch, finding them on Twitter, Reddit, sports forums and so on. Why pay $35 when you can get the games you want for free?
  • It’s a Joint Venture: I kinda sorta hate joint ventures. Do they ever really work? The most notorious example in streaming is Hulu, which folks forget launched nearly simultaneously with Netflix’s streaming efforts, but didn’t grow nearly as fast. Having four different corporate owners with competing interests and designs will do that. This streamer could suffer the same issues. (I wouldn’t want to be the executive figuring out whose tech stack will get used to build this new product or who gets paid what or whose shows go on the front page and so on.)
  • The Legal Challenges: We’ve already seen one lawsuit (from Fubu) and a potential antitrust challenge from regulators. In other words, this product may not launch this year if any of the challenges are even partially successful. (And like I’ve said for a little bit, if even this deal gets antitrust challenges, how will huge mergers get approved?)

The Biggest Upside May Not Be The Sports…

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The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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