THE PRICE POINT

The Price Point | As Cable And Satellite Shed Subs, Tipping Point Nears

No matter how you look at it, first quarter was another disaster for traditional cable and satellite.

Leading the pack was DirecTV with a loss of 620,000 subscribers. As first reported by Mike Farrell in Multichannel News, the loss caused Bernstein Media analyst Peter Supino to proclaim: “If DirecTV continues to bleed subs at its average pace over the last year, there will be no subs left in five years.”

Close behind DirecTV was Comcast, which lost 491,000 cable customers. Notably, Comcast added 461,000 high-speed internet customers in the same quarter. Comcast’s explanation that more people are working from home does not hold water. People are headed back to the office, not the other way around. Could it be many of those new internet customers are now subscribing to virtual MPVD services?

Not to be left out, Dish lost 130,000 satellite subscribers, plus 100,000 Sling TV users.

So, what does all this mean? It certainly makes a strong case for regulation of vMPVDs, just as the cable and satellite services they emulate are regulated. Fairness for everyone, including local TV stations, demands a level playing field.

More intriguing, perhaps, is the long-term, consumer-driven revolt that is changing the face of television. It is a revolt motivated not just by price, but by perceived value. That’s why so many consumers hate paying for cable, with its many unwatched channels, but consider $17.99 a month for Netflix essential to their wellbeing.

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This is not new information. For decades, consumers have told us they want an a la carte world in which they could pick and choose. The rise of apps is a reflection of that desire.

So is the future, as some believe, about apps and nothing else? The future is not that simple. Consumers still have an appetite for traditional linear services, including access to a certain level of advertising. Advertising is seen as content, so the future will continue to be about multiple video sources supported by both direct payments and advertising.

We must also remember that consumers care about content, not technology, which brings us to the question of 5G verses NextGen TV for the future of in-home video. Because it is a bigger pipeline, 5G should win, but I don’t think it will, at least not any time soon. AT&T and Verizon have chosen to throw their weight behind a lite version of 5G that does not come close to the technology’s potential. They appear to have decided the capital cost of a near-term rollout is not worth the investment. That decision opens the door for NextGen TV, which is already available in some markets.

It is easy to imagine a future in which all the promises of NextGen TV become the base of a home entertainment and information system, including traditional live television, on-demand and all your favorite apps.

But what if I’m wrong? What if local television stations eventually must compete in the open marketplace without technical advantage nor their traditional networks? In that case, we will finally see the long-awaited shakeout of local news. As a consumer, I would probably subscribe to only one or possibly two local news stations, which I would want to be available both live and on-demand. How much would I be willing to pay? $17.99 a month seems reasonable for a service essential to my wellbeing.

What will the future bring? Let’s watch the consumer and find out.


Hank Price is a media consultant and leadership coach. He is the author of Leading Local Television, a guide to leadership for television general managers, as well as those who aspire to top leadership. Price spent 30 years managing TV stations for Hearst, CBS and Gannett, including WBBM Chicago and KARE Minneapolis, as well as three other stations. Earlier, he was a consultant for Frank N. Magid Associates. Price also served as senior director of Northwestern University’s Media Management Center and is currently director of leadership development for the School of Journalism and New Media at Ole Miss. He is the author of two other books.


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weluvfakenews says:

May 3, 2021 at 8:25 am

…..and network Primetime viewing was down 12%..What was it without Sports (NFL)????…. more like 20%..Local and Network TV is a dying breed of entertainment!! Because they have no real impactful new ideas..and this was when everyone was shut in..in some of the biggest markets!!! I remember when getting a job in Local Television was a real prize..No more!!!


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