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.
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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.
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— Phillip Swann
The answer for Cable/Sat is right in front of their face. As the content contracts (locals and networks) expire don’t renew them. Provide internet and a FAST/AVOD/SVOD dashboard. Encourage customers to go antenna for locals. Those who only want news and weather don’t need locals thanks to FAST/AVOD services. This strategy will increase margins and force the networks to bundle their channels into streaming packages, which is already happening, along with locals being forced to stream and possibly engage services like LocalBTV. Goodbye to re-trans fees. Does the Cable/Sat industry have the courage to do this? They may have no choice if cord cutting continues to grow at its rapid pace.
MGZC, can you tell me what FAST/AVOD/SVOD is please
When I canceled Dish Network, I told them I was really tired of not having CBS because of their “dispute”. Not sad here.
Dish was terrible about yanking channels. We finally gave up when they had their big blackout with my local CBS affiliate and I couldn’t even watch the local NFL football team. YouTube TV + frndly.tv ever since and we couldn’t be happier. We’ve saved big money and the picture is far superior.
Yep! It’s all about money! Couldn’t have said it any better than that!!! Many years ago I had cable TV. When satellite first came out, it was much less than the cost of cable. So, I and many others went to that….When streaming started, many of us went to that, using You Tube TV….Excellent pricing at first. Then, their costs went up. Dropped them and got an antenna for locals. (Only watch local news using that). Got the streaming services I want…..this whole evolution started because of greed. And that is why legacy TV is dying a fast death now…..it’s all about the money! They want too much….and we refuse to pay it!!
This is really only the beginning. Decisions by streaming providers are also starting to annoy customers. Canceling popular programs without a story conclusion. Moving from binge-able content to weekly episode drops. Increasing prices. Eliminating sharing. Reduced content. We dropped all but one streaming service, and it’s sometimes months before something interesting shows up. It’s only a matter of time before people will be weaned from all streaming services at this rate.
Well, people have figured out Cable and Sat, but they will also figure out the major streamers because they are cable’s successors. There is very little on the “cable type” channels. Everything that is good is going to the On Demand paid services like Paramount and the like and Netflix and the like. Sling and YouTube TV will be the next when people figure it out.
Swanni, in your opinion, do you think satellite and cable will be obsolete sometime in the future ? If yes, when do you think it will be obsolete ?
Not for years and years.
I predicted years ago, before streaming became huge, that ala carte killed the “big” satellite dish, now streaming is getting to where, to get whatever your favorite viewing is, you need more and more services, I’m not talking locals, those that only watch locals are not the focus . personally as long as I can get the best of what i watch on Direct, I’ll stay with them