Tag Archives: Multichannel video programming distributor

Pro Choice

I never had cable TV until I moved into New York City after college.  You needed the cable there because the big buildings interfered with the over-the-air signal.  Suddenly, a new world opened up, as I had access to several more channels, including HBO.

Cable tv

(Photo credit: Wikipedia)

I had more choice, and I was all for it.  Apparently, I wasn’t the only one either. Cable television contributed to the substantial drop in the broadcast network viewing from 1983 to 1994 when weekly broadcast audience shares dropped from 69 to 52 while basic cable networks’ shares rose from 9 to 26 during the same period according to A. C. Nielsen.  What had been a 6 or 7 channel universe now had almost 40!  100 channels was a dream for down the road and today’s world over several hundred channels seemed impossible.  But of course, as The Boss reminds us, there were 57 channels and nothing on.

Fast forward to today.  Our T/V (television/video) choices are unlimited.  The only real choice we need to make is who is going to do the programming – us or the channel’s programming department.  When we do it, we can watch what we want when we choose to do so.  We can binge on an entire season over a day and we probably won’t have to be interrupted by nearly as much advertising.  Allowing the channel to program our viewing means that those of us who don’t choose to make a decision about programming need not.  We can watch T/V as it traditionally was done – passively.

This changed environment has led to cord-cutters and cord-nevers.  After all, when 75% of people just want a “light” package of channels, paying more for the hundred the cable company chooses to carry seems silly.  As eMarketer predicts:

In 2015, there will be 4.9 million US households that once paid for TV services but no longer do, a jump of 10.9% over last year. And that growth will accelerate in the coming years, with the number of cord-cutting households jumping another 12.5% in 2016. In fact, by the end of next year, the number of US households subscribing to cable and satellite will drop below 100 million…Also noteworthy, the share of viewers who have never subscribed to cable or satellite (“cord-nevers”) is growing as well. This year, the percentage of US adults who have never subscribed to cable or satellite TV will reach 12.9%. That share will grow to 13.8% by 2016.

I have no doubt the cable providers will innovate – allowing you to upgrade your TV, for example, as the wireless carriers do your phone, bundling in streaming music, or changing their business emphasis entirely to being broadband providers (BYO Programming!).  But it’s going to be an interesting transition in the pro-choice video world.  You agree?

 

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Fading To Black?

Over the last couple of years I’ve written about cord-cutting and today I have another update of sorts.  As you know, this refers to people disconnecting from a “traditional” video provider such as a cable or satellite service and using only content delivered to the via “over-the-top” services – things that sit on top of a broadband connection.  These are services such as Netflix, Hulu, Amazon Video, and others.

Here is what caught my eye:

Thirteen of largest multichannel video providers in the U.S. — about 94% of the market (94.6 million subscribers) — lost about 345,000 net additional video subscribers in 2Q 2013 — down 0.4%, according to the Durham, N.H.-based Leichtman Research Group…The top nine cable companies lost about 555,000 video subscribers in second-quarter 2013, compared to a loss of about 540,000 subscribers in the second quarter of 2012…Bruce Leichtman, president and principal analyst for Leichtman Research Group, stated: “The multichannel video industry has leveled off, with major providers losing about 0.1% of all subscribers over the past year.”

OK, so not exactly a massive disconnect.  On the other hand, the trend is accelerating by most accounts, especially among younger people.  Now let’s think about the ongoing battle between Time Warner Cable and CBS.  No matter which side you’re on, it gives people the opportunity to seek alternatives, at least with respect to CBS and Showtime programming.  Once they figure out that much of the content is available elsewhere, cutting the cord becomes more viable.

Another anecdote.  This past weekend, I wanted to watch the Solheim Cup golf matches.  The place in which we were staying didn’t get the network carrying the matches and the live streaming via YouTube was not available in the US.  Solution?  I watched on a proxy server in Europe.  Not some sort of illegal torrent – simply a proxy server so they thought I was in France.  For those of us who are a bit more technically minded (and I think anyone under 30 fits the bill), this is a form of cord cutting behavior and negates the need for anything more that a high-speed connection to watch what I want on my own schedule.

Finally, some more research from STRATA shows that none of this is going unnoticed by the marketing community:

Focus on television advertising has hit a three-year low as the gap between TV and digital narrowed to its closest point ever, according to the most recent quarterly survey compiled by STRATA…TV advertising still remains the top advertising medium with 44% of survey respondents saying they are more interested in advertising on TV (spot TV/cable) than any other medium. While TV is still number one, this represents the lowest level of broadcast advertising interest seen in the STRATA quarterly survey in nearly three years. Gaining steadily on TV, digital is the second most popular medium at 35%…28% feel they will have a greater spend in Digital than Traditional in 1-3 years. 27% say they don’t ever anticipate a greater spend in Digital (down 45% and the lowest percentage ever).

Ad spending is a big part of the fuel that drives these businesses (and the Time Warner/CBS dispute points out the relatively new other piece – transmission fees).  If that piece shrinks, along with viewers and subscribers, the industry is in big trouble.  As the Chinese say, “interesting times”.

Your take?

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Filed under digital media, Reality checks, What's Going On