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 Read More »

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Study: Global Pay-TV Subscribers Forecast To Reach 1 Billion By 2018

By | Wednesday June 12, 2013 @ 6:03am PDT

A new study by Digital TV Research reports that there are currently 814 million pay-TV households in 97 countries worldwide. The jump to 1 billion homes by 2018 will be led by the booming Asia Pacific region … Read More »

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Can Verizon Tie Pay TV Channel Fees To The Number Of Viewers They Attract?

By | Monday March 18, 2013 @ 3:28pm PDT

Funny how the prices that Big Media companies charge for their pay TV channels rarely have much to do with the consideration that really matters: How many people actually watch? That’s what makes Verizon‘s new effort to link payments with audience levels, which The Wall Street Journal disclosed this morning, so intriguing — but also such a long-shot. The company’s FiOS TV unit wants to base the fees it pays channels on the number of households where someone tunes in for at least five minutes a month. That wouldn’t necessarily reduce subscribers’ bills, Verizon’s top programming negotiator Terry Denson tells the paper. It would simply help to “stabilize retail prices” by rewarding channels when they attract additional viewers. But Denson acknowledges that it will be hard to persuade programmers to abandon their business models which are built on the presumption that they should extract fees from all subscribers including those who never watch their channels. He says that his talks with owners of small and midsized networks are just “inching forward” and he hasn’t broached the idea with Big Media companies that dominate TV programming. Read More »

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Pay TV Cord Cutting Will Be “Minimal” Over Next Five Years: Report

By | Wednesday February 20, 2013 @ 11:58am PST

PwC says that television execs have a little time to relax before their lucrative business models implode. The consulting firm reached its conclusion after sponsoring a recent debate between the Marketing Association of the Columbia Business School and the … Read More »

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Are Big Media Companies Needlessly Frightened About Pay TV Cord Cutting?

By | Monday November 12, 2012 @ 7:23am PST

Lazard Capital Markets’ Barton Crockett seems to think so in a thought experiment this morning. Asked to envision a change that could reshape the long-term prospects for media — part of Lazard’s Imagine That collection of analyst essays — he says that it “could be good for content-owning conglomerates” if consumers began to use the Internet to just subscribe to the channels that they want. To be sure, the analyst doesn’t see things changing soon; he says that the current system of pay TV bundling is “resilient, and not crumbling.” Still, he challenges the conventional wisdom that media giants would find themselves on a toboggan ride to financial ruin if consumers escaped from a system that requires them to pay for channels that they don’t want. Crockett bases his conclusion on two assumptions: Consumers would continue to spend $78B a year on pay TV. And, in a post-bundle world, content creators could collect all of that instead of settling for the $32B in program fees that they currently receive from distributors. Actors or producers wouldn’t try to appeal directly to consumers, cutting out Big Media companies, because they need someone who will “write big checks, and take care of the administrative hassles of marketing and distribution,” he says. “Anyone can make a singing competition, but networks like Fox and NBC can make them popular by touting them to large audiences, and investing large sums for the highest profile judges and best production values.” Read More »

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Are Pay TV Subscribers Well Served By A System That Rips Them Off?

By | Monday October 29, 2012 @ 11:51am PDT

Apparently so, according to writer Derek Thompson’s well researched and engagingly presented, but unfortunately misguided, article about pay TV pricing (“Prisoners of Cable“) in the latest issue of my favorite magazine, The Atlantic. He acknowledges that the seven largest Big Media companies — including News Corp, Viacom, Disney, and Time Warner — “use their oligopolistic power” to give cable and satellite customers a simple choice: either buy “a bloated offering of channels at an arrestingly high price” or go without. “Cable’s proposition to consumers is simple: if you want the new, good, TV shows, you need the bundle.” That’s unfair, right? Not to Thompson. The system that makes people pay for channels they don’t want also gives us classy fare including HBO’s Game Of Thrones and AMC’s Mad Men and Breaking Bad. “Indeed,” Thompson says, “it’s no accident that as pay-TV has proliferated, and costs have risen, we’ve also entered a golden age of television.” And even though “as a monthly fee, cable feels like a rip-off…as hourly entertainment, it’s not.” The proof: The bundle only costs 20 cents an hour for the average four-person home that watches as much as four hours a day. The kicker: “more than 100 million households still think the price is worth paying.”

Read 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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Will Canadian Pay TV Customers Soon Be Able To Buy Channels Individually?

By | Monday July 23, 2012 @ 1:37pm PDT

The country’s television regulators took a potentially big step in that direction on Friday — and it could reverberate in the U.S. where Big Media companies are determined to keep their lucrative pay TV packages intact. The Canadian … Read More »

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Most Pay TV Channel Names Are Unfamiliar To Overseas Viewers: Study

By | Wednesday May 30, 2012 @ 2:51pm PDT

EXCLUSIVE: Fox International Channels has mixed news for pay TV network execs who wonder whether their channel names have any meaning overseas, especially in fast-growing developing countries. Just a handful of networks resonated with the 14,000 respondents to a recent online survey conducted by Millward Brown Optimor. The study included 12 markets: Mexico, Brazil, Portugal, UK, Italy, Spain, Poland, India, Malaysia, Japan, Taiwan, and Indonesia. Discovery was the best-known channel, with 85% of the respondents saying that they are familiar with it. As part of the most globally focused Big Media company News Corp, it’s not surprising that Fox-related services did especially well in the study. It has five of the seven most recognized channels with National Geographic (82%), Fox (61%), Foxlife (44%), FX (33%) and Star (26%). (The list also includes Sony’s AXN, familiar to 52% of respondents.) But the vast majority of channels are familiar to less than one in five people surveyed. Read More »

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Pay TV Bundles Are OK (Even If They Hurt Consumers), Court Rules

By | Friday March 30, 2012 @ 12:51pm PDT

The U.S. Court of Appeals in Pasadena would have turned pay TV upside down today if it had sided with consumers in a suit that took on virtually every major company in the business including NBCUniversal, Viacom, Disney, Fox, Time Warner, Comcast, and DirecTV. The plaintiffs alleged that the companies exploit subscribers by only selling programming in packages — forcing people to pay for services they don’t want in order to receive must-have channels including broadcast networks, USA, and ESPN. But the court rejected the argument, upholding a lower court decision, saying the key issue is whether pay TV companies thwart antitrust laws. Although the consumers argued that bundling reduces their choices, and increases prices, “these allegations show only that plaintiffs have been harmed as a result of the practices at issue, not that those practices are anticompetitive,” the justices said. Read More »

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Can Intel Compete With Cable? Fat Chance

By | Tuesday March 13, 2012 @ 8:06am PDT

The conventions of mainstream journalism prevent The Wall Street Journal from saying in a report today what it really thinks about Intel’s new effort to compete with cable and satellite companies. The paper says that Intel is developing a full-fledged pay TV service to be distributed over the Internet. But you can pretty much tell the paper’s view by its use of the widely understood code to say that the idea is nuts. The Journal, reverting to the third person, says “it remains unclear” whether Intel can make its plan work. Good thing the paper added that caveat: There’s widespread scoffing in the media world today over Intel’s plans. According to the Journal, the chip maker wants to launch by year end, and has asked programmers for their “rate cards” for offering networks and shows. TiVo CEO Tom Rogers told investors at the Barclays Internet Connect Conference that “I did get a chuckle” out of that. What’s wrong with Intel’s plan? It isn’t a question about technology. “They’ve got the set top box concept down,” Bernstein Research analyst Todd Juenger says. “Now, all they need is… everything else.” Read More »

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Cox Scraps ESPN And Other Pricey Channels For New Low-Cost Tier

By | Monday January 23, 2012 @ 3:35pm PST

This is a fast-growing trend — and a worrisome one for many cable channels at risk of losing viewers, monthly payments from pay TV distributors, and advertising. But cable and satellite companies including Comcast and Time Warner Cable say … Read More »

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Analyst: TV Everywhere Will Add $12B A Year To Infotainment Ecosystem

By | Friday January 20, 2012 @ 7:24am PST

Needham & Co analyst Laura Martin is known for her smart and bold industry forecasts, and her latest is sure to draw a lot of interest. She says that TV Everywhere — where pay TV providers give subscribers the freedom to watch cable TV shows on mobile devices on demand — soon will generate more revenue than will Web-based platforms including YouTube and Hulu. Indeed, she says that it will be “one of the primary drivers of valuation growth for today’s TV ecosystem over the next five years.” About $10B of the additional dollars will come from advertisers and go to content owners led by Time Warner and Disney. Advertisers will pay for TV Everywhere viewers, she says, because people using mobile devices can’t zip past commercials as easily as they can at home with a DVR. Martin figures that sponsors would pay an additional $5.6B a year if just 10% of TV watching shifts from DVRs to TV Everywhere.  On top of that, advertisers will 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 … Read More »

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SNL Kagan: 10% Of All Homes Will Cut Pay TV Cord By End Of 2015

Some bad news today for the cable and satellite companies that have been pooh-poohing the possibility that millions of subscribers will cut the pay TV cord. Researchers at SNL Kagan — one of the most cable-friendly forecasting firms — say … Read More »

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Sky To Become HBO’s Home In Britain

The pay-TV giant has struck an exclusive output deal to be the only place to watch HBO shows from now on. Boardwalk Empire, Martin Scorsese’s series about Atlantic City gangsters, will be the first show to air through the … Read More »

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Netflix Sets Streaming Deal With Relativity (…Which Now Wants To Self-Distribute)

2ND UPDATE: I’ve just learned that Relativity Media will be in the distribution business sooner rather than later as it attempts to become a mini-major. Hmm.

UPDATE: relativity mediaThis exclusive deal with Netflix might be impressive if more of Relativity … Read More »

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