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Programming Costs Have Small Cable Operators Giving up on TV

The Wall Street Journal notes how some smaller cable operators, like Oklahoma's BTC Broadband, are backing away from offering TV services entirely as soaring programming costs erode their profit margins. This is, the report suggests, the beginning of a shift where only massive, mega-merged companies like Comcast/Time Warner Cable and AT&T/DirecTV can afford to offer programming, while smaller companies -- like BTC, Boycom Cablevision and CableOne focus on only offering pure data and voice services.

These companies are finding that it's simply no longer viable to pay an arm and a leg for programming so, like many consumers, they're deciding to cut the cord on traditional television. While mostly smaller operators now, even mid-sized Cablevision tells the paper that they see a future where they no longer sell cable TV services:
quote:
Tom Might, chief executive of Graham Holdings Co. 's CableOne, which serves nearly 700,000 subscribers in 19 states, says reducing emphasis on video service in favor of broadband has led to higher profits, even though some customers were lost in the process. The "trends are kind of hard to fight," he said. "Better to join them and make your profit where the business is growing." .. At least one midsize operator, Cablevision Systems Corp. CVC -0.79% , which serves nearly 3 million TV customers in the New York metropolitan area, has said it can imagine a day when it no longer sells television and makes broadband its primary offering.
One thing the article doesn't mention: as companies lose TV revenues many are going to take advantage of limited broadband competition to make up that lost income via usage caps and data overages.

Most recommended from 59 comments



ContentKing
@73.160.110.x

6 recommendations

ContentKing

Anon

Finally the light - Content companies are the villains

It is nice to see a news item laying out why cable costs so much - Hollywood and their out of control content monopolies and bundling requirements. Let's see the FCC or FTC or DOJ or Congress do something about that instead of complaining about cable companies.

tschmidt
MVM
join:2000-11-12
Milford, NH
·Consolidated Com..
·Republic Wireless
·Hollis Hosting

6 recommendations

tschmidt

MVM

Over the Top TV

Interesting these smaller operators claim profitability increases when they move to a non-TV business model.

Personality I'd love to see the day when ISP functionality and TV delivery are decoupled. In my ideal world ISPs are in the bit-delivery business and there is no reason content aggregators cannot be located out in the cloud rather then be part of the first-mile access network.

/tom

Red Hazard
Premium Member
join:2012-07-21
O Fallon, IL

4 recommendations

Red Hazard

Premium Member

A La Carte

These costs make a strong argument for A La Carte programming. If I am going to pay a king's ransom for video programming, then let me chose and pay for only the programming I want.

AlexNYC
join:2001-06-02
Edwards, CO

3 recommendations

AlexNYC

Member

Screwed up world.

If the Supreme Court had not killed Aereo, I bet those costs and cable prices would be going down beacuse of the competition. The problem in the US is Corporatism promoted by monopolies and lack of choice for consumers.