Monday, September 21, 2015

Cord Cutters Aside, Now There Are Cord Nevers

The best alternatives to the cable bundle may be coming out of the cable companies themselves.

Verizon, Dish and Cablevision were first to offer skinny bundles and streaming packages that offer smaller groups of channels over the Internet.

TV industry executives disagree how quickly the traditional cable bundle will decline. James Murdoch, 21st Century Fox chief executive, said at a Goldman Sachs conference this week that he expects “cord cutting” to decline by about 1 percent this year. But he and others predict many more offerings like Verizon’s will emerge.

“It’s a logical development,” Time Warner chief executive Jeff Bewkes said at a Goldman Sachs media and telecommunications conference this week. He said the new business models, including skinny bundles, have created revenue opportunities and larger audiences. In April, Time Warner released its $15-a-month HBO streaming app through Apple, Cablevision, Verizon and Dish. And its Turner broadcasting channels are available on Dish Network’s SlingTV service. “It’s probably good for consumers, and its good for us.”

The Washington Post reports the move toward slimmer bundles and streaming apps is a risky bet for an industry that has seen big profits from the large packages of channels that have been increasing in price and size. Over the past year, the industry was forced to look at new models. Ratings reached record lows for many networks over the summer. In August, overall cable TV ratings were down 9 percent. The entire media industry was hammered on stock markets after Disney lowered its guidance for cable revenue, admitting it was feeling pressure on the traditional cable bundle. ESPN, a Disney property, draws the highest fees of networks in the cable bundle. And in the second quarter, 566,000 cable and satellite subscribers canceled their service.

Potentially greater problems are on the horizon. Millennials aren’t watching as much traditional TV. I Industry executives are particularly worried about the growing number of younger consumers who have never subscribed to cable, telecom or satellite TV — and probably never will. In total, this group of “cord nevers” makes up about 20 percent of the people who don’t subscribe to television, according to the survey.

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