The best alternatives to the cable
bundle may be coming out of the cable companies themselves.
Verizon, Dish and Cablevision were
first to offer skinny bundles and streaming packages that offer
smaller groups of channels over the Internet.
TV industry executives disagree how
quickly the traditional cable bundle will decline. James Murdoch,
21st Century Fox chief executive, said at a Goldman Sachs conference
this week that he expects “cord cutting” to decline by about 1
percent this year. But he and others predict many more offerings like
Verizon’s will emerge.
“It’s a logical development,”
Time Warner chief executive Jeff Bewkes said at a Goldman Sachs media
and telecommunications conference this week. He said the new business
models, including skinny bundles, have created revenue opportunities
and larger audiences. In April, Time Warner released its $15-a-month
HBO streaming app through Apple, Cablevision, Verizon and Dish. And
its Turner broadcasting channels are available on Dish Network’s
SlingTV service. “It’s probably good for consumers, and its good
for us.”
The Washington Post reports the move toward slimmer bundles and
streaming apps is a risky bet for an industry that has seen big
profits from the large packages of channels that have been increasing
in price and size. Over the past year, the industry was forced to
look at new models. Ratings reached record lows for many networks
over the summer. In August, overall cable TV ratings were down 9
percent. The entire media industry was hammered on stock markets
after Disney lowered its guidance for cable revenue, admitting it was
feeling pressure on the traditional cable bundle. ESPN, a Disney
property, draws the highest fees of networks in the cable bundle. And
in the second quarter, 566,000 cable and satellite subscribers
canceled their service.
Potentially greater problems are on the
horizon. Millennials aren’t watching as much traditional TV. I
Industry executives are particularly worried about the growing number
of younger consumers who have never subscribed to cable, telecom or
satellite TV — and probably never will. In total, this group of
“cord nevers” makes up about 20 percent of the people who don’t
subscribe to television, according to the survey.
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