Starting in a few day, a new state law will force providers to sell channels on an à la carte basis.
Comcast, as well as TV broadcasters/content companies, including Fox, CBS and Disney, A&E, C-SPAN, Discovery and Viacom, have filed a countersuit against the state and 17 cities.
Now, to be fair, the burgeoning OTT industry -- where individual TV networks groups and publishers are starting up their own streaming app platforms -- is doing what this law intended. Another factor at play: There is a lot of cord-cutting in Maine.
Much has been made about OTT, SVOD and connected TV viewing through IP-connected systems -- traditional pay TV services continuing to lose major numbers of subscribers. This is still where the bulk of the TV business resides, amounting to billions of dollars.
Currently, around 80% of U.S. TV homes are still in the traditional pay TV universe, one where consumers can get 150 to 200 channels, virtually all ad-supported, for one big monthly price around $100 to $125, depending on the package
Concerning the Maine law, one can see why cable TV operators, big and small, should be concerned -- especially if such a law would start in other states.
At the same time, those pay TV services, including cable TV operators, continue to pursue their own OTT business efforts, either promoting their own company’s streaming efforts or through license deals with new OTT platforms on their digital platforms.
The complaint from cable operators and media companies looks to delay the Sept. 19 effective date, with the ultimate result of possibly throwing out the law.
Comcast and others argue this new law is preempted by federal law; and that it violates free speech. Also, that smaller, niche channels are at risk and could affect programming diversity.
Here’s the other piece of the argument from the TV industry to keep the status quo:
If pay TV providers were forced to sell networks individually -- across the U.S -- it would severely diminish subscribers for each of those networks, and in turn, overall TV advertising revenues. Many might go out of business. Plus, individual TV networks would get way less affiliates revenues.
Overall, those channels would then have to cut back on their programming, talent and other costs. In turn, cable, satellite, telco pay TV companies would also make much less money.
The only way to make up that loss in revenue and profits: Charge consumers far more money for those TV packages.
Hurting the little guy -- small- to medium-size TV networks? Who wants to do that? Likewise, render any ill-effect on pay TV subscribers.
But dinging the bigger TV companies? Consumers may have a different opinion.