Sure, those average 3% declines in subscribers every year for many traditional cable TV networks are worrisome -- especially those big media companies that don’t own broadcast TV stations or have sports franchises attached to their networks.
But what about the more drastic issue of nationwide “a la carte” unbundling of traditional cable, satellite or telco services? Earlier this year, Maine approved an “a la carte” law giving consumers the right to buy networks individually in pay TV packages.
Imagine, every month, if all U.S.customers were offered an option to pick and choose only the networks they wanted, That would cause major disruption.
If pay TV services like DirecTV, Dish TV, Comcast’s Xfinity, Charters’ Spectrum gave customers the option to pick and choose, it would be catastrophic, according to analysts, in terms of advertising and carriage revenue.
Maybe you now know why some streaming services have been looked upon as saviors. Welcome to the ease of the monthly, always ready to add or delete new streamer services, based on the whims of consumer behavior. See Netflix, Hulu, Disney+, Apple TV+, and others for details.
TV and media analysts have warned that if true a la carte became available across the U.S., cable TV networks that currently have 70% to 80% coverage of U.S. TV homes might immediately drop to 30% to 35% for some large, midsize and small cable networks owned by say ViacomCBS, Discovery, AMC Networks, or even Walt Disney.
For the traditional pay TV industry, this would mean the sky, in real industry terms, would be falling. With football-size hail. National TV advertising sales -- and worse still, overall carriage fees -- will crumble.
What would happen then? Big pay TV distribution companies -- cable, satellite, telco -- have warned consumers that a full-scale “a la carte” process would force them to dramatically raise prices pay TV packages.
For example, a $90 to $100/month price for 200 to 300 cable TV networks and broadcast stations might double. Alternatively, those who only want some 50 cable networks/stations might still have to pay $90 to $100 a month.
Some good news for media networks and distributors: Recently, a Maine federal judge issued a preliminary injunction stopping the state's recently enacted "à la carte" law -- because it likely violated the First Amendment rights of Comcast, ViacomCBS, Discovery and Disney, which filed a lawsuit against the law.
Media distributors -- and cable networks owners -- might now be thinking, some holiday gifts come late. But wait ... what’s the return policy if that business security system stops working?