TV The Regular Way, And TV Everywhere: Will Consumers Pay More?

Unless you don’t believe Nielsen -- and there are people in this camp -- 98% of premium video viewing remained on traditional TV as of the fourth quarter 2011, all after many years of growing digital video platforms.

Factor in that 98% number with another interesting number: 90.4% of U.S. TV homes – 103.5 million households -- get their TV via cable, satellite or telco operators, and 11 million over-the-air.

By this account, all the efforts to make TV Everywhere are already being paid for upfront. The owners of the TV Everywhere initiatives -- TV content owners and their traditional video distributors -- say all this will come at no cost to the consumer.

Still, 11 million or so homes will suffer. Around half of those homes -- 5 million -- have broadband and will continue to scope the still-free areas of Hulu, YouTube and other places for a hodgepodge of premium video from those programmers who don’t want to entirely shut out potentially paying customers down the line.

But the big question is: Will this seemingly no-cost TV Everywhere price tag stay the same down the road? My guess: Nope. Once cable companies and others saturate their coffers from digital and voice service revenue in the coming years, they’ll need something else to boost earnings.

Cable operators and the rest will tell you TV Everywhere is an enhancement – that they want to give consumers more access to the programming that most are already paying for. That’s very philanthropic of them. Were they holding back stuff in the past?

Sure, if you weren’t already a subscriber to HBO or premium sports cable networks, you weren’t expecting to get that programming for free on digital platforms, were you?

Shifts in those existing subscription TV services look like this: In 2011, U.S. cable operators slipped 1.5%, going to 60.5 million subscribers; satellite providers were flat at 34.5 million; telecos rose 15%, landing at 8.5 million.

Right now, over-the-air TV homes are making some shifts in looking to use broadband as a complement -- but that’s from a small base. Broadcast-only homes with broadband homes grew 14% -- 631,000, to 5.1 million.

Still, this isn’t what would be called “scale”  -- in other words, anything that would result in big media revenues. For that, focus on two numbers mentioned earlier – 98% and 90.4%. That will tell you much about current business intentions.

 

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3 comments about "TV The Regular Way, And TV Everywhere: Will Consumers Pay More?".
  1. Douglas Ferguson from College of Charleston , May 7, 2012 at 4:35 p.m.
    I wonder why 4 local broadcast signals per city are needed to reach 10% of the potential viewers. Seems a waste of transmitter electricity and spectrum. One signal per city is enough for rare emergencies. In most areas, a limited-basic cable service sells (unadvertised) for under $20/month. Maybe the gov't could subsidize that to the last 11 million and then auction off the underutilized signals to pay for it. Broadcasters would still get their 98% penetration, regulators would solve the bandwidth problem, and cable would have more customers to tempt with extra layers of limited-basic, perhaps a la carte.
  2. Doug Garnett from Atomic Direct , May 7, 2012 at 5:35 p.m.
    I've been disappointed that the "TV Everywhere" enthusiasts and promoters exhibit little sense of the value this might bring people - as if merely offering TV everywhere is enough. It's not. It's never been. And that's not the way the market works. In the long run, those who deliver what's needed everywhere will win out. For my son, TV everywhere means he can watch something on his iPhone even when we've dominated the TV in the living room. But, his absolute #1 preference is to watch on the big screen. For travelers, TV everywhere might mean catching a Game of Thrones on HBO everywhere while in a hotel. But for all but about 2% of US adults, that's only important a couple of times each year. It reminds me of the early days of DirecTV when they thought satellite TV was enough to cause a big market change. Their success only started when they offered something that (a) the market needed to satisfy a deep seated programming need and (b) which wasn't available anywhere else...NFL Sunday Ticket.
  3. Paula Lynn from Who Else Unlimited , May 7, 2012 at 7:06 p.m.
    In perspective: Cost - In what ways that consumers pay for more TV, is the total economic costs for that money not being spent on other parts of the economy ? Food, savings, personal debt...