Commentary
Niche Cable Nets Hit By Lower Subscribers
- by Wayne Friedman , Staff Writer, March 1, 2017
First the bad news. Pivotal Research says many mid-to-small size networks are taking a severe hit in terms of lower subscribers for Nielsen’s March cable universe estimates.
For example, Discovery’s American Heroes Channel is down 5.9%; Discovery Family Channel, losing 6.4%; Time Warner’s Boomerang, slipping 7.5%; Viacom’s CMT, off 9.8%; and Viacom’s Spike, sinking 7.2%.
All these are worse than the individual cable network median -- down 2.3%. Overall pay TV basic cable homes shrank 2.0% versus a year ago.
Now to be fair, Nielsen results don’t include growing upside -- albeit small -- from new virtual digital pay TV providers, like Sling TV, Sony Playstation Vue, DirecTV Now, and others.
That said, many of these networks probably wouldn’t necessarily make the cut on many 40 channel skinny TV bundles. For the most part, many of these OTT providers typically focus on top viewing broadcast and cable networks.
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Pivotal also says established sports cable networks -- channels that a significant chunk of U.S. TV consumers may want to leave behind -- are also getting hurt. Pivotal says ESPN2 and ESPN each were down more than the industry average -- 3.6%.
Now, the good news: Some fringe networks are going into the other direction, showing improvement. Notable ones included AMC’s Sundance, 10.5% higher; BBC America, 3.4% more; CBS’ Smithsonian, adding 5.4%; Discovery’s Velocity, up 6.3%; and Fox’s FXX, higher by 7.5%.
We say “some” because among 117 measured networks this year and last, only 27 showed some subscriber growth.
Overall, AMC Networks, Crown Media and Univision are the only TV network groups to see growth in subscribers -- up 2%, 1%, and 0.9%, respectively. Looking at the bigger TV networks groups, Fox did the best, slipping just 0.6% in March.
Some silver lining here. There has been a rise -- albeit small -- in the growth of new TV homes overall -- 1.7%. New non-traditional pay TV services like Sling TV, Sony Playstation Vue, DirecTV Now -- and forthcoming from Hulu and YouTube TV -- might sense this is an area in which they could gain.
Does that give some of these niche channels a chance ? Sure. But consumers might have to pay a bit more for this. The bottom line? Some savings for sure; but still many OTT/pay TV questions about the future.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
These cable channels don't have "subscribers" in the sense that individual households buy access to them, specifically, one channel at a time. Rather , they are parts of bundles of channels which are offered to subscribers of a cable system or a satelite delivery system. The composition of these bundles frequently changes as the cable systems and satellite systems evaluate the appeal of their offerings and adapt them not only to delete channels of relatively low interest, but to accomodate newer channels that---for a time---are hotter items and on the upswing. Most niche cable systems of the kind described in this piece could make quite a nice profit even if they lost 25-30% of their U.S. household coverage----so long as the systems and satellite providers that continued to offer them in their bundles kept paying then carriage fees which would offset much of the loss in advertising dollars coused by reduced coverage. If, however, skinny bundles became the vogue for 75-80% of U.S. households, then we would see the demise of many more selectively programmed cable channels and with that a dramatic resurgence of rating levels for the "mass programmed" channels and broadcast networks who would be included in virtually all of the new, smaller bundles. Would that be a good thing? I doubt it.