If You Own a Cable Net with "Few" Viewers, You Are in Big Trouble!

By Paul Maxwell Report Archives

If you are a subscriber to a Multichannel Video Programming Distributor (MVPD) you’re going to wind up paying more for less … but subscribing to pretty much only what you want to watch if you can afford it all. (And if you are Comcast with all of those cable subs and NBCU, well, just look at both sides of all the equations to come!)

All this is more than just cord-cutting and/or cord-shaving.  It is about more than just a disruption.  It is the beginning of a tsunami change in the media landscape.  And it will wash away more than just a few second and third tier networks.

Just look at what happened in Bristol, Connecticut last week … sports juggernaut ESPN dumped four percent of its workforce.  It seems about $6.50 per sub doesn’t quite cover what Disney expects to book as profit anymore.

ESPN has lost subs (according to Nielsen estimates, 8.5 million across the last four and half years) leaving it with “only” about 92million households.  (For great coverage and more details, check out our old colleague and friend John Ourand writing in Sports Business Journal this week).

Meanwhile, Viacom is in turmoil and the medium and small cable operators that have jettisoned even its major networks are showing little subscriber loss as a result.

Cablevision, Charter, Dish and others are deploying “skinny” bundles of just a few major channels and without sports … but selling extra packages by genre enabling the first wave of build-your-own-bundle.

So what’s next?

Well, the owners of large portfolios of “cable” networks will find that more and more MVPDs will be dropping the long tail of not-watched networks in favor of slightly higher fees on the most-watched networks consolidating expenses while trying to maintain margins.

I doubt you’ll lose your favorite shows, but you will get easier to navigate program guides.  And, all of your subscriber fees will follow the trends set by Netflix, Hulu and now YouTube.  More checks (or auto deduct credit card transactions) for you to track.

And you’ll get to complain about the high cost of TV again.

Random Notes:

My book The Revolutionary Evolution of the Media continues! Go here to read the latest chapter or here to read it from the beginning.

Congress is back in session. (Run for the hills!  The sky is falling!) Despite the turmoil in the House and the overall dysfunction rampant in both houses hearings are scheduled for this week on “cybersecurity,” social networks and the rise of terrorism, Title II’s effect on broadband investment and the re-nomination of FCC Commissioner Jessica Rosenworcel for a second term.

Over there, the European Parliament is scheduled to hold hearings this week on Network Neutrality.  Silicon Valley doesn’t like it.  According to Politico, the Internet Freedom Business Alliance sent a letter to Parliament saying they don’t like the proposal’s fast lanes, sponsored data regulations and more.  The group warned, "We believe that the future of the open Internet in Europe is at stake and urgent action is warranted."

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