A funny thing happened in recent weeks as the media industry wrung its hands over the long-awaited death of the lucrative cable TV bundle: Hundreds of thousands of people switched to another bundle.
Take Christopher Antoniacci of Anna Maria, Florida. When the standoff between Disney and cable giant Charter left him among the nearly 15 million cable subscribers without ESPN and many other networks, he took matters into his own hands.
At Charter’s suggestion, Mr. Antoniacci, 74, downloaded FuboTV, a streaming service that offers channels like ESPN. According to Sensor Tower, an analytics firm, nearly 500,000 people have done the same in the past two weeks.
“It has almost everything I need,” said Mr. Antoniacci, who signed up for a free trial. “It’s a cable replacement and it seems to work,” he added.
As cord-cutting accelerates across the country and millions of Americans ditch their traditional cable TV packages each year, the pay-TV package that has been a linchpin of the media industry for decades is in danger of being upended. This became clear when Charter, in its war of words with Disney, declared that parts of the cable bundle were “broken.”
But the agreement between the two companies this week suggested the package was unlikely to go anywhere. It’s just a matter of adapting to new viewing habits as cable companies aim to sell new packages that include streaming services.
As part of the agreement, Charter’s TV customers will now be offered Disney+, a streaming service that includes many of Disney’s biggest shows and films.
“We may well view this Disney charter deal as the opening salvo of a broader rebundling,” MoffettNathanson, an influential research firm, said in a note Monday.
For more than half a century, the cable television bundle was one of the best companies in media history. TV giants like Disney were paid twice: first by the cable providers, who spent billions each year to bring channels like ESPN to their subscribers, and then by the advertisers who opened their wallets to promote products alongside the hottest shows .
The package was also good for cable providers, who steadily added new subscribers: At traditional cable’s peak in 2012, more than 100 million Americans paid for the package.
This era is over. About five million people are now giving up cable TV every year, leaving about 75 million Americans in the traditional TV ecosystem, according to analyst estimates.
Most analysts expect that 40 to 60 million Americans will continue to use some form of traditional cable television in the coming years. However, the sharp decline is changing the terrain for both media companies and distributors.
Many cord cutters are already putting together their own package, subscribing to a mix of services including Netflix, Max and Hulu. The Disney-Charter deal made it clear that cable providers — which often offer broadband Internet service — are interested in putting together streaming packages for them.
William Rouhina, chief executive of Chicken Soup for the Soul Entertainment, which owns several ad-supported streaming services, said Disney’s deal with Charter is evidence that the traditional cable business is changing dramatically.
“I think this could be the harbinger of a very big change in the industry,” he said.
The winners and losers of the new game have yet to be determined. But at least in the short term, the new bundling probably won’t be as profitable as the traditional cable business, said Tom Freston, a member of MTV’s founding team and a former CEO of Viacom.
That spells trouble for the media industry titans who are trying to exploit the cash-rich cable business for as long as possible while building streaming services instead, he said.
Mr Freston pointed out that live sports and news programming, which has not yet been fully replicated by streaming services, was crucial to the pay-TV package. National Football League games, an entertainment staple for tens of millions of Americans, have been broadcast on traditional television for years under existing contracts, providing a lifeline for cable providers.
But streamers are also starting to move into this territory. Amazon and YouTube are capturing NFL fans by snapping up soccer rights, and Apple has started showing Major League Baseball and Major League Soccer games.
“It’s hard to fight the convenience of improved technology,” Mr. Freston said. “When sports and news inevitably move to streamers, that will be the end of the game. And what a game it was.”
Still, Mr. Antoniacci, who reached out to FuboTV during the standoff between Charter and Disney, said he was not ready to rule out pay TV for good. He has been a cable subscriber for several decades, paying for television and internet access. He had been thinking about downgrading his cable subscription and keeping a slimmer package with access to his local news channels.
But for now, he keeps what he had.
“This situation makes me think a lot about how I use these media providers,” Mr. Antoniacci said.
Source : www.nytimes.com