Many pay TV providers have been dinged from cutting back on traditional TV cord-cutting. But it is not always a solid declining trendline.
Take Comcast, the biggest U.S. cable operator. It witnessed a net growth in cable subscribers -- up 53,000 in the first quarter 2016.
Since traditional pay TV packages can still cost around $100 a month, why isn’t the OTT services of Sony’s Playstation Vue or Dish Network’s Sling TV -- which can offer TV consumers TV packages for as low as $20 a month -- doing better to change the dynamics?
Perhaps we aren’t looking at the bigger picture -- as well the niche picture.
Bernstein Research says true TV cord-cutters tend to have “niche” tastes in TV programs -- a specific genre or even a specific TV program. In that regard, it doesn’t make sense to have 200 to 300 channels for that consumer.
But to those who watch a broad range of TV programming, between 9 and 15 channels, brand loyalty may be fluid. Maybe those 9 to 15 networks aren’t hard and fast. So having the option of 200 channels for those consumers is still good.
Now, premium digital video platform Hulu -- whose owners are three major media companies, Walt Disney, 21st Century Fox, and Comcast -- is coming out with a package as well, according to reports. It will cost $40 a month.
The key here: Hulu owned by media companies that own three of the four big broadcast networks. CBS also entered the ring some time ago with its low price, $5.99/month, CBS All Access OTT service.
So for all this TV, consumers can now get their usual traditional TV networks -- and selected cable TV networks owned by those big media companies -- for around $46 a month. This is more cord-shaving than cord-cutting.
But don’t expect other pay TV providers to take this lying down. They’ll come out with their own OTT services -- even if it secretly might hurt existing business. Dish may never allude to the word “cannibalization” and its Sling TV. Others who join the OTT business will avoid the same.
Still, it remains to be seen what specifically will see future cuts. Pay TV providers, TV networks, other content?
Here’s the real skinny: It’ll be TV on a diet.