Sounds Of Change For TV Industry: Squealing Wheels On A Curve

• by Wayne Friedman , Staff Writer, September 22, 2014

Can you hear that? Brakes are squealing; steering wheels are turning. TV executives are trying to get ahead of the curve -- or of accidents.

A rush of newfangled Internet-connected TV services have been introduced from Sony, Dish and Verizon. Others will possibly be coming.

You might not believe any of this will amount to anything -- especially since we have heard warnings about this kind of stuff in the past. Yet Craig Moffett of MoffettNathanson Research says there is now a difference, since big content providers like Disney and Viacom are making deals.

And Les Moonves, president/chief executive officer of CBS Corp., is talking up the strong possibility that its premium cable network Showtime will go “a la carte.” There has likewise been much talk that Time Warner is looking to free up HBO.

Why? You know the answer. Netflix keeps coming, and consumers are making some easy decisions. It costs roughly $10 a month for Netflix -- about the same as for HBO and Showtime. But of course there is a catch: Consumers are thinking that they can buy Netflix alone (but not HBO or Showtime) and kick the rest of their big monthly cable package to the curb.

Cord-cutting, though, is still relatively minimal. But it can rear its ugly head at any time. Multichannel distributors continue to warn about higher programming costs, in part coming from higher sports franchise fees. Then again, AT&T promises that its deal for DirecTV should mean a 20% reduction in programming costs.

Consumers hear talk like this and become more interested in alternative TV service plans -- especially those that hopefully come with a less expensive price tag.

What does this mean for advertisers? More options are always desirable. But with them comes more fragmentation -- as well as more questions about viewership measurement for those services.

But for others, there is focus and a road map: heavy feet on the gas pedals.