Kelly Scott Madison

Unbundling Cable

02/11/2016

 

Find out how cable providers intend to defend their future grip on the contested format 

Linear pay TV has received a lot of bad press this year in light of continuous streaming success stories for properties like Netflix, Amazon Prime and even Hulu. Most trade publications tout the unstoppable power of online streaming, and its ever-growing ability to attract subscribers and viewers away from the world of traditional, linear TV (broadcast and cable). These discussions are usually framed in terms of declining ratings for all linear TV, as well as the overall pay TV subscription universe. “Cord nevers” and “cord shavers” are increasinglyconsidered the norm in a more price-conscious and on-demand world. However, don’t write off the cable companies, networks and content producers yet. There are ever-growing challenges in the landscape, but cable providers still hold the keys to the kingdom, and they intend to defend their future grip on U.S. TV homes.

Cable networks had a rocky 2015 as they adjusted ratings and revenue projections based on the new viewing landscape. Finding audiences through online and traditional channels, and monetizing both based on different viewing experiences has proven to be one of the greatest challenges the video world has ever faced. Demand for traditional television programming is greater than ever before, but navigating different pricing models for advertising, airing and licensing broadcast rights to multiple viewing platforms is no easy feat.The mid-year 2015 financial reports showed cable networks reporting cautious downgrades to their revenue projections and sent the entertainment market into a tailspin. Production giants like Viacom and Disney seemed to be acknowledging trouble ahead in the television marketplace. Viacom ended the year with declines over 2014, but Discovery Channel, AMC and FOX News all experienced year-over-year gains due in part to hit original programming within younger demographics and surprisingly popular live current-event shows like the Republican debates.

It has been estimated that around 2 to 3 million TV homes (approximately 2 to 3 percent of all U.S. TV homes) have reduced the number of channels they receive or cut the cord completely since 2012. The overwhelming demand for cable still exists, but networks are preparing for a decline in subscriptions over the next five years. How fast that decline could accelerate in the nextfew years is up for debate, but it’sclear that pay TV providers need toevolve with consumer demand. Approximately 85 percent of U.S. households currently... 


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