Not Just Consumers Cutting The TV Cord: Small Cable Companies Dropping TV Also

from the internet-is-where-it's-at dept

For years now, we've been talking about TV watchers cutting the cord and preferring to go internet-only. There are a variety of reasons for this, such as the price of cable TV these days, which keeps rising at a rapid pace, and also the simple fact that the internet provides a much better value for many people. But it turns out it's not just the viewing pubic that is cutting the cord. A bunch of smaller/regional cable companies are dropping TV from their offerings as well -- and the reasons are similar: the cost to offer TV channels keeps going up and up, and focusing on just internet service is a better deal all around. In some cases, cable companies are simply dropping expensive channels, and in other cases, they're giving up on TV altogether. From the WSJ:
The latest is Suddenlink Communications, an operator that serves about one million customers, which says it plans to drop Viacom Inc.'s TV channels, including Nickelodeon and MTV, at midnight Tuesday. Suddenlink says it has already signed long-term contracts with other channels to fill the Viacom channels' slots.

[....]

After seven years of selling customers cable-TV services, BTC Broadband got out of that business late last year and now provides just broadband and phone services. The Oklahoma company, which had been serving about 420 TV subscribers, decided it simply couldn't afford to keep paying rising fees to carry a basic lineup of channels including ESPN, TNT and MTV.
The article notes that companies offering cable TV to about 5 million current customers probably will no longer be offering such video services, almost entirely due to cost. Those companies are finding that it's just a better deal for them to focus on offering internet services as well.

We've been arguing for years that the TV business is unsustainable, but the big media companies still see it as a last beacon of hope as other parts of their business have been chipped away. Because of that, they're increasingly relying on it (hence the rapidly increasing fees). But it's unsustainable, in large part because the internet undermines the whole thing.

While we don't hear it that much any more, a decade ago, the talk of the industry was the vaunted "triple play" offering: "voice, video and data." Some analysts would add in a fourth item of "wireless" to make a "grand slam" (mixing up their baseball metaphors). But as we've been saying for a decade, that was always misleading: "voice and video" are data. You don't need "voice, video and data." You just need "data." Wireless is just a way to deliver the data. But the internet enables all of those things. The greater access that can be offered at greater speeds, unencumbered, the less specialized services for "voice and video" matter. The traditional phone business is already on the way out. Video is next. These small players leaving the video business are just an early warning shot, just like the cord cutters.

It's all data.

But this is also why the net neutrality fight is so important -- and why the big players like Comcast (while pretending otherwise) are so desperate to control things and block true net neutrality. The longer the big old media companies can keep the highly inefficient system of cable TV alive, the more money it can squeeze out of it -- and there's a LOT of money being squeezed. It won't die any time soon, but it will die off. That's just the natural progression of things when you realize that it's all just data, and a pipe that is optimized just to "deliver data" is always going to win out in the end.

Filed Under: data, internet, net neutrality, tv
Companies: btc broadband, suddenlink communications


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  1. icon
    Smoochy18 (profile), 1 Oct 2014 @ 8:07pm

    Streaming is great, but live TV is key

    It's no surprise that cable companies are becoming broadband companies. They have the infrastructure, and it's a heck of a lot more profitable than delivering TV.The business of TV delivery in the U.S. is broken. It's not the fault of any one entity (broadcasters, content owners, service providers), they are all tied to their archaic business models. But the consumer has become lost in the middle while these entities fail to work together to solve a problem. Ergo - cord cutting. Streaming on-demand content is fantastic. But what we can't give up is live broadcast TV. The technology of delivering live broadcast TV to the masses does not lend itself well to IP protocol. The UK proposed it a couple of years ago and abandoned the idea. If a sovereign state smaller than the state of Texas could not make it work, how do we think that would happen for the U.S.? Live broadcast TV is essential to American society. It brings us together. The existence of free over-the-air broadcast, obtainable with a simple TV antenna, is a treasure we should fight for.

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