A new study suggests that pay-TV providers might not be able to count on today’s 18- to 34-year-olds as longtime future customers. At the Cable Show today in Washington, Pivot — Participant Media’s cable network that launches August — released the first of what says will be an annual industry report about how millennials consume TV content. The study looked at “broadbanders” (aka “cord cutters” or “nevers”), those who do not currently subscribe to pay TV services but have broadband/Internet access and watch TV programming, and “cross-platformers” (aka “strayers”), subscribers who have both broadband and Pay TV. Among the key findings: 13% of 18-34 year olds (8.6 million) who already have broadband service are committed to a broadband-only existence, a much higher percentage than in previous reports. In addition, many cross-platformers are looking to stray from the “pay-TV ecosystem” (17.9 million 18-34s, as well as 32 million 18-49s). But the report also indicates that 7% of at-risk cross-platformers would consider keeping their pay TV subscriptions if offered programming streamed live and on demand anywhere/everywhere, and 58% of broadbanders would consider subscribing to TV for a bundle of networks from their broadband provider, streamed live and on demand. Not surprisingly, 92% of respondents ages 18-34 want VOD streamed everywhere and anywhere and 94% would feel more positively about networks that offer VOD streamed everywhere.
It’s a shame that the general public usually can’t read industry reports from Bernstein Research’s Craig Moffett. When he’s on, which is frequently, his stuff is as thought provoking and engagingly written as anything you’d see in The Atlantic or The New Yorker. So I’ll consider it a public service to summarize his compelling effort this morning to bust one of the tech world’s most fervent beliefs: that that some company — perhaps Google, or Apple, or Netflix — will topple the pay TV oligopoly by offering cable programs or channels, possibly a la carte. Microsoft recently backed away from its dream of offering a cable-like service through its Xbox game console. Others will also give up, Moffett says, because the problem isn’t that Comcast or DirecTV are ignoring consumer demand to break up the expanded basic package. Six companies — Disney, News Corp, NBCUniversal, Time Warner, CBS, and Discovery — account for 90% of all viewing hours. They demand that their channels be sold in packages, ”and only that way,” Moffett writes. Didn’t the music industry try to do much the same thing with CDs before it had to back down and sell individual tunes for 99 cents? Yes, but the music industry had to respond to Napster offering songs for free. The danger of that happening to TV channels “is nothing like what the music industry faced ten years ago (at least, not yet),” Moffett writes.
BSkyB has for years held exclusive rights to the movies of the major Hollywood studios in the first subscription pay-TV window, the UK’s Competition Commission pointed out in a provisional report issued today, saying Sky’s large subscriber base is preventing rivals BT and Virgin Media from bidding successfully against Sky for these rights. BSkyB responded by saying it will cooperate with the the ongoing regulatory review but believes that no regulatory intervention is required.
“At the heart of the problem is Sky’s strong position in the pay-TV market, with twice as many subscribers to pay TV as all other traditional pay-TV retailers put together,” said Laura Carstensen, who headed the commission probe. Sky supplies some other pay-TV companies with its movie channels, but the industry watchdog said that prices charged for the service are too high. Consumers are paying up to $98M a year too much to see films on television as result of Sky’s dominance, the commission said. Subscribers to Sky’s 12 movie channels pay roughly $60 a month.
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: This exclusive deal with Netflix might be impressive if more of Relativity …
French publisher Lagardere has begun the process of selling its 20% share of the pay-TV group Canal Plus now that talks with 80% owner Vivendi have broken down. Vivendi was not going to pay the €1.4 billion ($1.8 billion) Lagardere wanted. …