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Most Viewers Want To Limit The Pay TV Channels They Buy: Study

By | Tuesday September 24, 2013 @ 9:01pm PDT

This may come as a surprise to the many programming executives who insist that cable and satellite customers like pay TV’s pricing bundles that require them to pay for channels that they don’t watch. Research and consulting firm PwC heard a different message in June when it surveyed 1,008 people about their video consumption preferences. About 44% favor a la carte pricing, the company says in its new U.S. Video Content Consumption report, while 29% want a package that’s “more customized to my individual interest.” Another 8% said that they’d just like small collection of essential services, with 6% saying that they want to access individual shows instead of full channels. Just 14% said they’d prefer the “full package” that gives them the most options. Those who want something different say that it would provide “more control over the content that appears on their screens and allows their viewing time to be more enjoyable and well-spent,” according to PwC which followed its surveys by conducting focus groups. Some 65% of the people who want a change say that they’d be willing to access 10 or more channels, while 26% put the number between six and nine, with 9% between two and five. How much would they pay? About 16% would go to 99 cents a channel, 24% would go to $1.99, 22% would go to $2.99, and the remaining 37% would go higher.  In other findings: Read More »

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Could A Viacom-Sony Deal Lead Cable Operators To Raise Prices For Streaming?

It just might if it frightens them enough to accelerate their efforts to make people pay for broadband based on how much they use — the same way they pay for electricity or water. ”This isn’t just a side show,” independent analyst Craig Moffett says. “This is THE central issue defining the value of the cable industry going forward.” And the pricing model could rock streaming companies including Netflix or, perhaps, Sony. It would be “a material risk” to Netflix’s prospects if a Sony-Viacom agreement leads to usage-based pricing, Bernstein Research’s Carlos Kirjner says. Read More »

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John McCain Calls On FCC To Review Pay TV Channel Bundles

By | Wednesday June 12, 2013 @ 3:26pm PDT

The FCC might not want to take on this issue — but that hasn’t stopped the Arizona senator, and former GOP presidential candidate, from pressing it today. “The time has come for television video consumers to have the option to either purchase individual channels or the tiers of channels currently offered by cable and satellite companies,” John McCain says in a letter to Acting FCC Chairwoman Mignon Clyburn. “Today, this option does not exist and consumers are forced to buy channels they do not want,” he wrote. “This is wrong, and action should be taken.” Noting that consumers “want options that the current television market is not providing”, McCain asked Clyburn “to review this issue and take steps to shift this balance toward consumers, by providing consumers with greater choice when purchasing television video”. He rejects cable programmers’ claim that the pay TV bundle is a good deal for subscribers. Read More »

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Time Warner Cable CEO Warns That Price Hikes Might Backfire: Cable Show

Time Warner Cable CEO Glenn Britt, cable’s Jeremiah when it comes to the industry’s rising prices, appeared more worried than ever today — and still out of step with his colleagues — when he discussed the issue with Wall Street analysts at the annual Cable Show taking place this week in DC. “People are starting to pay attention to the fact that the multichannel TV package, the big package which is in 90% of the homes, is starting to get too expensive for lower-income people,” he said. Broadcast networks, sports channels and others who have stepped up their demands for higher rates shouldn’t become cavalier just because “nothing is going to happen” with Sen. John McCain’s bill to promote a la carte pricing. (Britt added, “And he doesn’t think so either, by the way.”) The bill is “just the beginning of it. It would behoove the whole industry including the content companies who are all crowing about their pricing power to pay attention because it will come to some end that we may not like if we all keep behaving the way we are.” It was hard to find others at the industry love fest who’d publicly agree. Read More »

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Viacom Chief Scoffs At John McCain’s Effort To Bust Pay TV Bundles

By | Wednesday May 29, 2013 @ 12:54pm PDT

Viacom CEO Philippe Dauman had better hope he doesn’t have to testify at a congressional hearing where Sen. John McCain’s asking the questions. The entertainment exec gave the back of his hand today to the Arizona Republican’s new campaign to promote a la carte pay TV pricing. McCain “got a lot of publicity for his solo sponsored bill which he’s been doing for 15 years now,” Dauman told investors at the Nomura Global Media & Telecom Summit. The proposal has “no co-sponsors, [and is] going nowhere.” One big reason, Dauman says: The current pay TV bundles are “great for consumers. Consumers are enjoying what many call the golden age of television because we have a number of networks….come from nothing and know that they have distribution.” But he says “the opposite would be true” with a la carte pricing. “Consumers would get fewer channels without saving any money.” Although some analysts wonder whether online video will promote cord cutting, Dauman still sees the businesses as complementary. MTV will introduce an app for streaming programming “very soon,” following Nickelodeon’s which the CEO says has been “very successful.” Indeed, he says that channel apps “can be the method by which you get TV Everywhere” as opposed to apps from pay TV distributors. Viacom’s program carriage deal with Netflix expires at the end of this weekRead More »

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Are Big Media Companies Driving Off A Cliff?

By | Friday October 12, 2012 @ 4:25pm PDT

That’s the critically important question that’s being debated  across the industry and — finally! — head-on by two of the Street’s savviest analysts: Bernstein Research’s Todd Juenger and Craig Moffett. Juenger kicked things off in a note last week, and Moffett delivered his response today. The core issue is whether millions of consumers will cut the pay TV cord rather than accept ongoing price hikes driven by network owners including Time Warner, Viacom, News Corp, Disney, NBCUniversal, CBS, and Discovery. For competitive reasons, they want to pack more original shows and high-priced sports on to their schedules — and pass the rising costs along to cable and satellite providers. But the pay TV distributors say that they’d need to pass their higher costs on to consumers, and too many are so cash-strapped that they’ll simply cut the cord and watch shows from over-the-air broadcasts or low-priced Internet services such as Netflix. If things continue, the argument goes, then Big Media will have to abandon the lucrative and ubiquitous basic cable bundle that requires customers to pay for lots of channels that they never watch. If that happens, and channels are offered a la carte, no more than 10 would be profitable enough to survive, Needham & Co analyst Laura Martin estimates.

Here’s a synopsis of the arguments Junger makes in defense of programmers — and Moffett’s explanation why he thinks they’re headed off a cliff: Read More »

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Disney Has Most To Lose, And CBS Most To Gain, If Pay TV Goes A La Carte: Analyst

By | Monday July 30, 2012 @ 7:43am PDT

Cable A La CarteThe conclusions are part of an intriguing study out this morning from Lazard Capital Markets analyst Barton Crocket. Like many Wall Street analysts, he’s eager to know which programmers have the most to gain, and lose, if the current pay TV ecosystem — which requires consumers to pay for channels that they don’t watch — collapses. And Disney is most at risk, Crockett figures based on the results an online survey of 2,240 consumers in May. The study sought to determine how loyal consumers are to different channels. As you might expect, the Big Four broadcasters, ESPN, Discovery Channel, History, USA Network, and TNT have the most dedicated followings. (At the bottom of the list: OWN, Fox Soccer Channel, CNBC, Oxygen, and CMT.) The problem for Disney is that its channels aren’t popular enough to continue to justify the nearly $8.4B a year they currently generate from program fees — about 26% of pay TV’s total programming outlays. Crockett figures Disney’s take could drop 65.2% to $2.9B a year. Other potential losers include Time Warner (not including HBO) which could see yearly Read More »

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Analyst Warns: Pay TV Will Fade As Young Viewers Look For Cheaper Alternatives

It’s a big deal when an analyst as respected as Credit Suisse’s Stefan Anninger slashes his  pay TV subscription forecast for 2012 to a 200,000 loss from a 250,000 gain, which is what he did this morning. But the rationale behind his decision is even more noteworthy: He cites a Credit Suisse-commissioned survey that found evidence of a youthful revolt against the pricey video packages. Lots of young adults aren’t cutting the cord; they never subscribe in the first place. Anninger says that while the evidence is still mostly anecdotal, “we are confident  that a relationship exists” between high pay TV prices and declining subscriptions. And the growing group of “cord nevers” (as opposed to “cord cutters”) is “the biggest challenge pay TV will face over the next 10 years” after piracy and soaring programming costs — although “it does not feel like the industry is yet willing to admit that reality.” Execs still accept the conventional wisdom that the recent decline in pay TV subs is due to the weak economy. Once things improve, they believe, then young people will jump on the pay TV bandwagon — especially when they have kids. But Anninger says things could play out differently: These young adults and their children will have grown up “in a world in which the Internet (at least from a technological perspective) was capable of delivering a reasonably satisfying video experience” for free, or a lot less than a cable or satellite TV … Read More »

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Survey: Free TV Use Up For The First Time In Years As Consumers Cut Pay TV Cord

By | Monday June 6, 2011 @ 1:28pm PDT

Cable cord-cutting may be a real phenomenon after all. For the first time in four years there’s been an increase in the number of homes that just rely on antennas to receive programs from local broadcast stations according to research firm Knowledge Networks’ 2011 Ownership Survey and Trend Report. A survey of 3,343 people in March and April found that 15% of all homes now just depend on free TV, up from 14%. That puts the total number of broadcast-only viewers at 45.6 million people, up from 42 million last year. Knowledge Networks says that about 30% of the free-TV homes are pay TV cord cutters. Most said that they cancelled their cable, satellite, or telco TV subscriptions because they wanted to save money.

Although the increase in free TV use is small, the fact that it grew at all could frighten some investors. A 1% drop in the number of pay TV subscribers would shave about 1% off the market value of the largest cable programmers including Time Warner, Viacom, Disney, News Corp, and CBS analyst Laura Martin of Needham & Co estimated last year. Pay TV companies struggled for more than a year to reassure Wall Street that there’s nothing to fear. Cord cutting concerns diminished at the end of the first quarter when cable, satellite and telco TV companies reported a slight uptick in their total subscribers.

The new figures also could complicate the Obama administration’s effort to promote wireless … Read More »

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“Why Hollywood Should Care About The Comcast/NBCU Deal”

I asked Andrew Jay Schwartzman, the SVP and Policy Director of the Media Access Project in Washington DC (http://www.mediaaccess.org) to write up his thoughts on the proposed merger:

Why Hollywood Should Care About  the Comcast/NBCU Deal

By Andrew Jay Schwartzman

ComcastNBCComcast’s proposed acquisition of NBCU is bad for Hollywood.

It is bad for America, too.  There are lots of reasons why.  Here are just a few:

– It will raise cable prices.

– It will reduce diversity in news and other programming, especially in the markets where Comcast would own TV stations and cable systems.  (In Los Angeles, Comcast would own some cable systems and three TV stations.)

– It will make it much harder for telephone and satellite companies trying to compete with video offerings of their own.

Even if you don’t care about the future of democratic discourse in the age of the internet, if you’re reading this, you will probably care about the industry.  And this transaction would have lasting and dangerous effect on Hollywood.  It will further solidify cable’s bottleneck on the video distribution of TV and features and enable cable to pay less for such content.  And, perhaps most importantly, it will kill off the emerging market for “over the top” distribution via the Internet, depriving producers of the opportunity to develop direct relationships with competing distributors and even with individual consumers.

Simply put, cable owns the customers, and it wants to keep it that way.

The Internet is making it possible to distribute programming directly to

Read More »

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