PS Vue and Now Maddy G TV To Shut Down

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Roku Community To Feel the Loss of Maddy G TV When they Shut Down in 2020

The News Has Not Been Good For Cord Cutters This Week

First Sony announced they were shutting down their Live streaming service Playstation Vue and then the same day we heard from the developer of another popular Roku Channel, Maddy G TV they were shutting down their channel also in 2020.

While both content providers shut down for different reasons, which we will cover more in depth, loosing these providers is still troubling.

Sony Shutsdown Vue Because of Raising Prices from Content Producers

While PS Vue was a paid subscription live streaming TV service, it never became as popular as some of its Live TV streaming competitors like YouTube Live, Sling TV or Fubo TV.

Some blame Sony's choice of name for the platform. Had they maybe named it Sony Vue, instead of Playstation Vue it may have gained a wider following.

Sony blames the rising prices of channel content providers. Saying they could not run it at a profit. And have said they will go on to support other streaming content providers on their popular Playstation Gaming system.

Certainly these headlines did not help their platform either:

PlayStation Vue loses all Sinclair-owned local channels | Polycom

PlayStation Vue will lose all of Viacom's channels | The Verge

How Long Can PlayStation Vue Hold On? | The Motley Fool

No matter what the reason, losing a content provider with big pockets like Sony is not a good thing. Less competition only means higher prices are in store for the future.

Higher Prices for Cord Cutters May Be the Future

While cord cutters have enjoyed low prices for a while, this may be short lived based on another troubling conversation we read in the awesome Roku Rocks group on Facebook.

The developer of Maddy G TV Paul Gorman announced yesterday that their popular free Roku channel would be shutting down in January of 2020.

They were a popular ad-supported free Indie Roku channel.

Here was their official announcement:

Maddy G TV

"With many thanks to our fans, we are announcing today that MaddyGTV Roku will be closing in January 2020.

While we've worked tirelessly to make it a viewing experience that is both satisfying and affordable to our fans, the advertising landscape of 'Streaming TV' has simply not been able to keep up with the growing demands of the marketplace.

We will still continue to produce original programming and distribute the best of the best of indie thru our various partnerships including Amazon, Vimeo and retail outlets, we will no longer be able to support the Roku platform.

Our Roku Channel will continue to run thru 2019, and we thank you for over 4 years of streaming broadcasting."

The ensuing conversation that followed in the post on Roku Rocks between Paul Gorman and Robin Remde, another popular Roku channel developer who owns uduigital and have developed several popular Free channels on Roku and several other members was very interesting. And this helped shed some light on what is happening with free ad-supported content providers on the Roku platform as a whole.

"Gabriella Stance I am very curious to learn what has changed @ Roku that makes it no longer feasible for them to remain on the platform."

"Justin Harvey Gabriella Stance that is a very good question who really knows"

"Gabriella Stance There are a few Roku channel developers in this group, so hopefully they will chime in to shed aome light on this."

"Paul Gorman Gabriella Stance It’s been widely published that Roku has 29% of the total TV audience, yet has only managed to capture 3% of the advertising being spent.
Of that 3%, smaller indie channels like MaddyGTV get a tiny sliver of it.
The costs of streaming (bandwidth, software, programming) plus content acquisitions and production are expensive.
The advertising just can’t keep pace with the costs. After 4 years, we just can’t afford to keep supporting it at a loss.
The disproportionate amount of viewers to advertisers is not a sustainable model, and Roku knows it. They are spending millions on ad infrastructure and data analysis, and they’ve been telling developers for years to “hold on...” but the model itself is flawed."

"Robin Remde The truth is that it's not possible for a small channel to earn a living, or even be profitable as an ad supported channel - never has been the case. Even with 7 channels and 3500 titles, we struggle to get enough ad revenue - we work with 16 different ad companies to keep the ball rolling, and the big guys won't even talk to us because we're not big enough. Basically, if you're not generating at least 1 million ad requests per day, you're not worth talking to. We've had that said to our faces. It's not Roku, per se - it's that the agencies don't want to bother with small developers."

"Paul Gorman Robin Remde That’s exactly the case. MaddyGTV has over 350k subscribers, and the bigger we get, the more expensive it is to run. And we’re relatively ‘nobody’ in the space.
I believe the biggest players are ‘investing’ at a loss, (Netflix hasn’t even made any money yet) and the smallest players are hobbyists.

You’re exactly right, The model isn’t sustainable for us. We have 4 ad providers, smaller ‘mom and pop’ direct advertisers, and we’ve been running at a loss for 4 years now.
We’ve been talking about it for months, but seeing Sony bow out, convinced us that we needed to make our move sooner than later."

"Gabriella Stance Small developers may need to come together to form a coalition of sorts. It is one thing for one small company to try to get their foot in the door, but a coalition bringing a few hundred collective smaller ones to the table may be big enough."

"Paul Gorman Gabriella Stance the problem is really that the big ad buyers are not supporting ‘Streaming TV’. Think about it. If Roku has almost 1/3 of all TV viewing, but they are only getting 3% of the advertising, that model doesn’t even work for the biggest players.

It’s why you see the same ads play over and over when watching ad supported channels. There literally just isn’t enough ads in rotation.

Here’s how it works. When a company like Mazda makes an ad buy, they go to agencies and say “Spent $500k”. That agency then plugs those commercials into thousands of channels on demand, thru an automated ‘request’ system, until the money is gone. It’s a tremendous deal for them. They pay around $0.20 an ad play. But it’s a terrible deal for the channels who end up getting around $0.08 an ad play after everyone takes their cut.

And there’s thousands of us little channels making requests for ads every minute."

"Gabriella Stance That makes sense. Hopefully, the environment will be more sustainable in the future. Until then, it seems the only way to contiune would be as a paid subscription service."

"Robin Remde Paul Gorman The only thing I'd dispute is the price per play - Mazda's CPMs (cost per thousand impressions) are 20, not 200 - need to move the decimal over one place ;-)."

"Robin Remde Gabriella Stance The problem with subscription services is that you need HUGE numbers of subscribers to be profitable. And what can a small guy charge? 4 or 5 bucks a month? Half of that is going to go to payment processing and the provider (Roku, Amazon, iTunes). We've tried both, and as small as the ad dollars are, we can make a living on ad supported - subscription services for small guys just doesn't make sense."

"Paul Gorman Robin Remde lol. I stand corrected. I think the number of decimals in the whole equation is part of the problem."

"Paul Gorman Robin Remde even the ‘big guys’ can’t do it. Netflix hasn’t made money yet. They are living on credit. Sony just dropped out today."

"Robin Remde Paul Gorman Actually, Netflix was profitable last quarter - right after the price hike. And that with 15 billion in original and exclusive content spend. They're also spending a ton of money expanding into new markets, so they're expanding very heavily still. Sony dropping out with their vue product was expected for a while. It never gained much traction with audiences - certainly not a big enough base to keep their content exclusive."

"Paul Gorman Robin Remde I read Netflix’s ‘apology letter’ to the share holders and smirked a bit. If you add up all the debt, are they still in the black?

I don’t presume to know more about this than you, you’ve been ahead of us thru the whole curve. I remember submitting my early films to RSquared."

"Gabriella Stance Netflix doesn't need to show a profit. Reinvesting earnings into acquiring more assets is just as lucrative, and in some cases moreso. The rules are much different for mega companies with deep pockets."

"Paul Gorman Gabriella Stance Right. Amazon operated at a ‘loss’ forever. The ‘deep pockets’ will stay in the game until the model gets worked out and makes sense."

"Robin Remde Paul Gorman as far as being in the black, they're servicing their debt (making their payments), and debt is just an ongoing expense. So by that measure, yes, they're in the black. Interesting that they're now accumulating bond debt in euros - so they are anticipating significant growth in the EU."

"Robin Remde Gabriella Stance you hit the nail on the head with the rules being different for the big guys. Once they're publicly traded, it's WAAAAY more important to fuel growth than profitability. Hence the debt, and with interest rates so low, for big business, it's a no brainer."

"Gabriella Stance Investors and Wall St generally don't care about operating in the red. It is not viewed favorably to hoard profits vs leveraging assets against loans to grow the portfolio. They like assets, steady growth, and favorable ratios."

Hopefully, this interesting exchange helped shed some light on what is happening with the ad-driven FREE TV industry. It will be sad to see Maddy G TV shut down because the Roku community will be losing some more great free content from a talented independent channel developer.

Here is a list of more popular and Free ad-supported channels to watch on Roku »