Cable TV “failing” as a business, cable industry lobbyist says


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The ACA represents about 750 small and mid-sized cable operators who serve about seven million clients all through the US. The ACA has additionally been one of many main teams preventing broadband laws, akin to internet neutrality and on-line privateness guidelines, and a now-dead set-top field proposal that may have helped cable TV subscribers watch the channels they subscribe to with no rented set-top field.

Cable “isn’t what it was”

"The cable enterprise is not what it was due to the excessive prices," Polka stated, pointing to the quantity cable TV corporations pay programmers for sports activities, broadcast programming by way of retransmission consent charges, and different programming.

When requested about twine chopping, Polka stated, "it is the video problem of our time as shoppers study they've selection" from providers like Netflix, Hulu, and Amazon Prime.

"It provides shoppers extra selection, one thing that they've needed for a very long time, extra management from the bundle of cable linear programming," Polka stated. "Our members, nevertheless, I feel are very aggressive in how they're making an attempt to offer shoppers that they serve with extra selection via on-demand [channels], by means of availability of over-the-top providers, ensuring that their broadband plan is quick sufficient to help a shopper's video habits. So, sure, it is a factor that is occurring in the present day, twine slicing, twine shaving. However as an business, our members are properly primed to have the ability to serve their clients with their broadband service that permits them to eat the video they need."

Video is “definitely our worst product”

That is one purpose cable corporations within the ACA see broadband as "their future," Polka stated.

A cable firm government who appeared alongside Polka on the C-SPAN present echoed these feedback.

Video is "definitely our worst product," stated Tom Larsen, senior VP of presidency and public relations for cable firm Mediacom. "It makes the least sum of money."

Larsen can also be an ACA board member. Mediacom is the US' fifth largest cable firm, although its 832,000 video subscribers are a fraction of Comcast's 22.5 million. "We was the eighth largest [cable company in the US], however due to all these mergers and acquisitions we maintain shifting up with out doing something," Larsen stated.

The pay-TV market misplaced about 410,000 subscribers in Q1 2017, "the primary time that the business has ever had internet subscriber losses within the first quarter of a yr," Leichtman Analysis Group reported last month. The highest pay-TV corporations throughout the cable, satellite tv for pc, and telco industries nonetheless account for 93.three million video subscribers.

Whereas broadband subscriptions are rising, video clients are leaving due to rising costs and on-line video competitors, Larsen stated. However traditionally, video has "all the time been an enormous income driver for us" and has "paid in lots of methods for the community that's in a position in the present day to ship broadband. So we're not able to abandon it but."

Excessive costs, low buyer satisfaction

Primary-cable TV costs have been rising quicker than inflation for 20 years, in accordance with Federal Communications Commission data. The truth that cable corporations not often compete towards one another immediately in cities and cities helps them maintain costs excessive, and clients have begun filing lawsuits over "broadcast TV" and "regional sports activities" charges that push cable prices above the advertised rates.

Pay-TV and Web service suppliers rank last amongst 43 industries tracked by the American Buyer Satisfaction Index (ACSI), suggesting widespread shopper dissatisfaction.

Even the most important cable corporations complain about programming prices. However Polka stated it is "very reasonable" to say that, due to economies of scale, Comcast and Constitution can ship programming extra cheaply than the small cable corporations within the ACA. (Comcast additionally owns a lot of the programming it delivers over its cable TV system, akin to NBC and numerous regional sports activities networks, and it expenses different cable operators for the suitable to air that programming.)

Twine-cutting has additionally harm programmers reminiscent of ESPN, which has misplaced hundreds of thousands of subscribers and is laying off many on-air personalities.

TV blackouts

The ACA has complained repeatedly about broadcasters demanding greater retransmission consent fees from small cable corporations than from massive ones. TV channels are sometimes blacked out when cable corporations refuse to pay the broadcasters' worth (although they're out there at no cost with an antenna). Final yr, the Federal Communications Fee decided not to step up its oversight of contract disputes that typically take these channels off cable techniques.

"What occurs within the video market is the large [cable companies] get the most effective costs and the programmers look to the littlest guys to make up the distinction, so our worth will disproportionately get larger," Larsen stated. "So the markets we serve, that are historically small, rural markets, can pay greater than an city market. It is type of a unique digital divide. It is a pricing divide."

In negotiations, broadcasters "just about have the leverage as a result of they will merely black out their stations," Larsen stated.

Larsen and Polka each praised the FCC's new Republican management for taking a deregulatory strategy to broadband. However Larsen stated he does not anticipate the FCC to take any main motion on TV blackouts. "I assume, in need of some main market occasion, I do not see the brand new chairman doing something about that concern," Larsen stated.

The Nationwide Affiliation of Broadcasters argues that cable corporations "are merely trying to keep away from pretty compensating broadcasters, who produce the highest-rated content material on tv." The affiliation says the federal government should not intervene in contract disputes.