By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, I just read that Comcast lost a huge number of cable subs. Why does this keep happening? Why does Comcast and DIRECTV keep losing so many customers? — Barry, Erie, Pennsylvania.
Barry, Comcast today reported that it lost 614,000 net video subscribers in the first quarter, bringing its total down to around 15 million. That’s a net loss of roughly seven million video subs in the last seven plus years.
The cable operator is not alone in its video misery. DIRECTV has lost more than 12 million satellite subscribers since AT&T purchased it in 2015 and Dish and Charter’s Spectrum have also lost huge chunks of its audience.
Why, you ask?
It’s too easy to say cord-cutting because cord-cutting is only the symptom, not the disease. The real problem is the high prices that cable and satellite operators must charge to offset the always increasing carriage demands from programmers.
Over the years, networks such as CBS, ABC, Fox and NBC as well as must-have sports channels such as ESPN have demanded that the cable and satellite services pay more and more money to carry their signals. And if the pay TV ops refuse, the networks pull their signals, forcing the pay TV ops to explain to an angry customer base why their favorite programs are no longer available.
It’s basically a game of hostage. Pay up or lose your customers. The cable and satellite services usually pay up, particularly if it’s a channel that would cause large subscriber defections. But once they pay up, they immediately begin planning how to pass the costs along to their customers in higher monthly bills and tricky ‘hidden’ fees such as regional sports network surcharges and Broadcast fees.
With the emergence of cheaper streaming services, such as Netflix, HBO Max and Disney Plus, many cable and satellite customers have cut the cord and decided to watch less, pay less and enjoy it more. Even if it means they might go without a favorite channel or sports network, they are happy with their decision because they are saving so much money.
The irony here is that the networks that triggered this situation are now crying that they are not making as much money from the cable and satellite bundle because there are fewer subscribers. Well, that’s what happens when you kill the Golden Goose.
Regional sports networks are now feeling some of the pain of their actions with Diamond Sports, the owner of the 19 Bally Sports RSNs, declaring bankruptcy last month. And there will be more fallout with more RSNs and other channels forced to layoff more employees and perhaps radically restructure their operations.
Of course, this was all avoidable. But greed is a powerful motivation.
Have a question about new TV technologies? Send it to The TV Answer Man at firstname.lastname@example.org Please include your first name and hometown in your message.
— Phillip Swann