US TV Business Continues to Change

Pay TV Subscribers

For some time now, the TV business in the US has been changing. Discussion of cable/cord cutting or cable/cord shaving (downgrading pay TV service) is affecting all areas of the home entertainment industry. The following chart shows the development of pay TV subscribers in the US since the third quarter of 2014 according to Statista. It shows a slow, but continuing decline of Pay TV subscribers among the top eleven pay TV subscribers in the USA.

There are a lot of developments that show how the whole infrastructure is in flux at the moment.

Apple is in discussion with networks (ABC, CBS, NBC and Fox) to create a service that provides local live TV feeds streamed on any Apple device through its new Apple TV service. As it turns out, the networks do not own the rights of the local live feeds of affiliates. However, they are now negotiating with these providers to represent them for the Apple deal. The New York Post believes that this is going to happen as talks are progressing.

As Charter Communications is trying to acquire Bright House Networks and Time Warner Cable, one of the obstacles was that the FCC sees this as a roadblock towards free access to the Internet for OTT providers. Now Netflix has been voicing its support for the deal, as Charter says that it will not charge any online video company for transmitting over its network more efficiently as Fierce Cable reports.

Then there is now the second class action suit against the Direct TV/NFL deal, as Fierce Cable reports. This deal, also called Sunday Ticket, allows Direct TV users to see all NFL games. The class action suit contends that the exclusive deal with Direct TV forces business owners to deal with Direct TV and its fee structure. This can be very costly, as the fee can be anywhere between $2,324 and $120,000 per season depending on the business.

Analyst Comment

Overall, business deals are made and new players are changing the rules of what may be successful in the coming years. This trend of new offers, services and packages will increase, with new services appearing and disappearing quickly becoming more the norm in coming years and the consumer may, or may not, benefit from this development. – NH