Commentary

Do Consumers Want A Cable Network-Only Digital TV Service?

by Wayne Friedman , Staff Writer, September 13, 2017

Philo, a new service of live, linear digital networks, will be cable-only with no sports networks, according to reports.

But beyond the “no-sports” channels, why would these mainstream cable networks be of interest to viewers — especially when this would include many other networks that consumers may not watch?

Five major cable-only network companies — Discovery Communication, Viacom, AMC Networks, Scripps Networks Interactive and A+E Networks — are starting the service, according to The Wall Street Journal.

Monthly subscriptions are expected to be less than $20 a month. Specific channel lineups have yet to be disclosed.

The problem for many of these cable companies is too many networks. Cable-network-centric companies have struggled to find a home for all their nets — which can be a roster of 12 to 20 channels deep — on new digital OTT platforms.

Have we forgotten that for decades, TV consumers demanded “a la carte” choice in picking individual cable networks — including sports networks?

This move seems to be spurred by what cable-network-centric groups don’t have: a broadcast network.

NBCUniversal, Fox Network Group, CBS Corp. and Disney-ABC Television own both cable and broadcast networks. They have made wide-ranging deals with Sling TV, Hulu with Live TV, YouTube TV, DirecTV Now, and others.

Those companies also have solid investments in sports programming — which have been somewhat controversial for many pay TV providers — cable, satellite, and telco — given the high license fees.

Major new digital services know the importance of those broadcast networks because they still get the widest possible number of potential viewers and the greatest reach.

All this can be confusing for the consumer — should they now buy a bare-bones Sling TV package and Philo — and Netflix? Perhaps the better combination would be YouTube TV and Philo.

Are TV consumers finally getting what they want? This isn’t the true “a la carte” functionality they envisioned. But that said, there are plenty of cheap prices being thrown around — $20- or $35-per-month packages.

Now the real work begins. Not for big TV network groups, but for consumers figuring out what products to buy.

cable tv, digital, tv

4 comments about "Do Consumers Want A Cable Network-Only Digital TV Service?".

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Ed Papazian from Media Dynamics Inc, September 13, 2017 at 9:39 a.m.
I've launched a new and even more cost effective "skinny bundle". For $1 a month you can come to my house and watch all of the TV you want---until 10pm, when you've got to leave. Also, no bathroom or kitchen activities are permitted---unless you pay extra. So far, I've signed up three of my neighbors and am thinking about talking to one of those Wall Street types about going for an IPO---say, for $50 million at least. Or, maybe, I can sell my service to one of the big digital players as a low cost entre to those billions of TV ad dollars. On my "platform" we will know exactly who is watching---no need for big data simulations or Nielsen ratings.
Reply

Sheldon Senzon from Senzon Media Marketing LLC, September 13, 2017 at 11:24 a.m.

Leave it to someone "smart" like Ed Papazian to break it all down. I think you're being a little modest with IPO expectations. Wait until some digital ditz removes their headphones and tries to understand your math. This is classic Ed. Thanks

Michael Margolies from Michael Margolies Photography & Design, September 13, 2017 at 4:58 p.m.

As one of the dupes who still uses Satelite TV we are forever waiting for the mythical ala cart programing so often promised. Our package is 90% channels of which we never watch ever, 5% shopping channels and 3% on-demand type channels which we watch next to never.

That leaves 2% of the remaining channels as questionably useful and very few of those are eer watched either. So why do we pay an embarrassing amount for this less than useful service? Because across all that there are one or two progrmas we DVR from each channel we do watch that we cannot get if we don't buy the giant package.

If given the option we would subscirbe to perhaps no more than 10-12 channels. And thats the problem. Providers know they have to stuff the programing and force everyone to pay for crap they don't want to be profitable. Eventually someone is going ot figure out a way to give consumers what they want (ok I know thy can do it but no one is going to let them, not the FTC, not the FCC, Not Congress). As usual consumers, voters, and tax payers get screwed over by everyone else.

Ed Papazian from Media Dynamics Inc, September 13, 2017 at 5:43 p.m.

Michael, your typical heavy user of TV---that 20% of the population that accounts for just over half of all viewing---- is not wavering in its support for "linear TV" and I guarantee you that few of these---except those under extreme financial stress ---are cutting the cord. So even though the cable systems will be trimmed down by a certain amount of "cord cutting" there probably is a base subscriber level below which they cant sink unless they do something crazy---like doubling their prices suddenly. Since cable systems are still extremely profitable, due mainly to their monopoly positioning in most locales----they may have to adapt in various ways but they are not dying out.

As regards having a free choice of exactly those channels you want, that's not a viable business proposition. Just look at most of the so-called "skinny bundles" now being offered for streamers at $15-$40 per month. In order to stand a chance to obtain critical mass in subscriber totals while paying their content suppliers what they demand, these, for the most part, incude all of the "usual suspects"---ABC, CBS, NBC, FOX, ESPN, Bravo, USA, etc.----and exclude many of the more selectively programmed channels. That's because the organizers of most of these skinny bundles have no choice but to spread as wide a net as possible while inducing consumers to opt for a cheaper service. In other words, don't hold your breath. The perfect a la carte world, as it applies to TV content availability, may never become a reality.