Commentary

Doing The Math: Cablevision's Dolan Figures Out What's Needed For OTT

by Wayne Friedman , Staff Writer, April 9, 2015

The coming onslaught of over-the-top TV services would seem to finally bring “disruption” to the long-time content and pay TV provider model. Still, looking closer, maybe nothing will change that much.

James Dolan, president/chief executive officer of Cablevision Systems Corp., believes OTT services are merely “alternatives” to the current big, all-you-can-eat cable TV packages, as quoted in a recent Hollywood Reporterinterview. Dolan says: “You're going to see a slide to over-the-top, and it's being driven by price and by availability and by selection. At Cablevision, our mantra is to do what we call ‘ride the wave.’"

Dolan doesn’t believe that offering unique deals for individual TV networks or groups of networks is the way to go. “We want to be your company. We don't want to tell you what to watch."

All that would be keeping with the idea that it won’t just be individual TV media companies -- like CBS, Sony, or others -- offering special OTT packages, but that traditional pay TV companies, like cable operators, might join the hunt.

“What's interesting about OTT services is, anyone could do one,” says Dolan. Dish Network, for example, has already started Sling TV.

Sounds like Cablevision and others may possibly begin allowing customers to pick and choose networks on a “a la carte” basis. But they know the math will work out on their favor. Want to get just HBO, about 10 to 15 cable channels, a couple of TV stations, and a sports network or two? Maybe all that comes to $60 a month, down from say, the $75 a month you might already be paying.

Savings? Sure. But then say a big TV show on a network you don’t have gets a lot of attention-- and all your friends are watching. Social media will tell you what you’re missing. So perhaps you need to buy another package of TV networks, for $10 more a month. Now you are at $70.

This will be the complex financial calculations consumers will need to make. And it seems pay TV providers like Cablevision may already have worked out those formulas.

cable tv, tv

2 comments about "Doing The Math: Cablevision's Dolan Figures Out What's Needed For OTT".

Check to receive email when comments are posted.

Howard Zoss from Zig Marketing, April 9, 2015 at 2:37 p.m.
On the contrary OTT will blow Dolan out of the water eventually. He does not want to EVER sell components because he will lose a ton. As it is, Millenials are uncoupling cable and declines are bordering on the dramatic. Think about the Digital Natives generation following ... might as well call them the unconnected, because you don't need to uncouple what you don't susbscribe to. Think 'music' because the money is going out of the tire and eventually when Dolan is forced to go a la carte, the stock will slide big time. The only thing he has figured out is that he will ride the wave until its gone.
Reply

larry towers from nyu, April 9, 2015 at 4:37 p.m.

It all depends on pricing. Cable providers seem to be assuming that the pricing works out better for cable, but I am not so sure. The other thing to bear in mind is all of the other chanels that get bindled in to cabe packages that no one cares about. Will cable be forced to improve the content available in order to compete? Will they fight to get rid of community access programs etc. since OTT providers have no such constraints?