Finally, after years of consumer complaints about high cable bills due to hundreds of unwanted channels, many obscure networks like Chiller and MTV Classic are on the way out.
Unfortunately, the death of all those small channels and networks is not expected to lower cable and satellite TV prices, according to the industry. That’s because programming costs are still rising faster than price increases.
Statistically, since 2008 the average number of channels in U.S. cable bundles has grown from 129 to 199. Nielsen reports, however that on average most people watch about 15 different channels per week.
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The Shutdown Begins
As more people revolt against high cable bills, cut service and seek slimmer packages, media companies are being forced to shut down some channels. Comcast Corp. (NASDAQ:CMCSAC), which owns NBCUniversal is shutting down Esquire and Cloo. Viacom Inc. (TSX:VIAD) is reducing its focus from two dozen channels to 6 core networks with channels like MTV Classic among the first to be canned.
Discovery Communications Inc. (NASDAQ:DISCAC) has been pairing back investment in the American Heroes Channel and Destination America to focus on bigger brands. Behind all this pullback is the fact small networks can’t survive on reruns when consumers have options like Netflix Inc. (NASDAQ:NFLXC).
Less For More
As the number of channels on cable and satellite decrease and prices continue to rise, albeit more slowly, it’s not surprising that more people are turning to streaming and curating their own preferred packages.
At the same time the number of choices available in the non-cable arena is growing. Consumers are left with two choices – pay more for less with cable – including channels they don’t want or pay less for a better fitting package via OTT TV.
Streaming mechanics using Apple Inc. (NASDAQ:AAPLC) Apple TV, Roku and Amazon.com Inc. (NASDAQ:AMZNC) Fire devices, to name a few, have made managing various subscriptions much easier. As for the offerings, choices include Sling TV from DISH Network Corp. (NASDAQ:DISHC), DirecTV Now from AT&T Inc. (NYSE:TC) and Sony Corp.'s (NYSE:SNEB) PlayStation Vue.
Coming soon: Alphabet Inc.'s (NASDAQ:GOOGLC), (NASDAQ:GOOGC) YouTube TV and a new video-on-demand service from Hulu that will be offered by The Walt Disney Co. (NYSE:DISC), Comcast, 21st Century Fox (TSX:FOXAC) and Time Warner Inc. (NYSE:TWXC).
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YouTube TV Wants To Be The Place You Land
Of all the OTT services currently offered and on the way, YouTube TV might be the most ambitious. According to CreaTV Media founder, Peter Csathy, “YouTube wants to be the single place for all your video needs, plain and simple. Full stop. Period. That is what they want to be.”
The service plans to give customers access to live programming from more than 40 networks including ABC, CBS, FOX, NBC and ESPN. It also plans to offer live sports from ESPN, Fox Sports Networks, Comcast SportsNet and some local TV stations. Finally, Showtime and Fox Soccer Plus will also be offered for an additional charge.