Commentary

Break Up Broadband & TV Businesses: Can Consumers Do The Math?

Sen. Al Franken (D-Minn) doesn’t really like the idea of an AT&T-DirecTV merger. He’s worried the big combined company will have too much leverage -- forcing customers into packages they don’t want, and raising prices.

One thing that would make it palatable would be to keep the combined company’s broadband business separate from the TV-related services. Expanding that further, you would like to think Franken and many legislators would like this to be case for all big media distribution companies, like Comcast, Cablevision Systems, Charter, Verizon and others.

Of course, more regulation is a nice dream for many of those against big media consolidation.  But the train of decoupling broadband services from general TV distribution services left the station a long time ago.

Many would say the way to combat this, from a business perspective, is to consolidate from the other side, with ever-bigger media content companies among the likes of CBS, NBCUniversal, 21st Century Fox, Time Warner, Viacom, and Discovery.

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From the consumer’s perspective, all this is not enough -- which has increasingly pushed many to dip their toes in the water when it comes to “cutting the media cord.”

The number of broadcast-only TV homes is inching up, with a recent 3% climb, now to 11.6 million U.S. homes. There were 105 million total pay TV subscriptions in the U.S. in the fourth quarter of 2010, and now 101.8 million in the first quarter of 2014.

Experts would say a 2% drop here is relatively nothing -- especially when other businesses such as broadband distribution and broadband TV viewing are climbing. But with options like Aereo going away, all that makes it a bit harder for consumers to make the leap.

Consumers like the ease of packaging all their media/communications in one place -- but not for a higher price. Also they also want the faster speeds, better quality TV/video, and the most programming choice.

And there’s the rub.  Would they mind having two, three or more different media/communications companies to get lower monthly bills? You would think so. But all the math might be harder to decipher. Franken believes they can figure it out.

 

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