CHICAGO – Although there is a lot of buzz about skinnier programming packages here at this U.S. show, the Federal Communications Commission has not mandated this change yet, like the CRTC has for the Canadian BDUs.
From an outsider looking in, it appears they are just going to keep talking about what works best for everyone, so the consumer gets what they want – eventually. We have to wonder when they will walk the walk. No one stated they had any clear plans on what they may do and with the American cable channels are not budging yet (that we are aware of), insisting on big basic bundle carriage.
There was more buzz about Disney (specifically ESPN) filing a lawsuit recently against Verizon over the telco’s pricing and packaging structure of its new customized pay-tv bundle. ESPN says Verizon is violating the terms of their affiliation contracts. Verizon unveiled a cheaper, slimmed down bundle due to consumer demand, which prices ESPN and ESPN 2 separately from the bundle’s core package of channels. ESPN asked the court to stop Verizon from “unfairly depriving” the network of the benefits of its bargain. Verizon is focused on giving their customers what they want and feel they are within the rights to offer their customers these choices.
In a panel session called Choice, Change & Rise of the Skinny Bundles Peter Chernin, CEO of the Chernin Group (and former News Corp. COO) believes the death of the cable bundle is still widely exaggerated in the States and the industry needs to work on TV everywhere awareness, which enhances the value to consumers. He noted the data out there that shows consumers watch only 10 to 15 different channels is incorrect, as his research shows 43 channels are watched for at least 30 minutes
Suddenlink’s president, Kathy Payne provided the consistent two items their customer research showed; consumers want more choice and lower prices (surprise!); and they want more control over their purchases. Suddenlink embraced that and added Netflix to its cable platform to keep themselves competitive and for ease of use providing an advantage against cord-cutting.
Univision Communications president, Tonia O’Connor emphasized distributors and programmers must work and learn together to find the best solution as it affects all parties business models. O’Connor noted while 50% of overall television content is watched live, the Spanish-language network is seeing 90% of its sports, news and appointment entertainment series consumed live.
It will be interesting to see if Verizon will be able to keep their new packaging on the market and there’s little doubt the U.S. industry will be watching Canada to see what happens when bundles are pried apart and how it affects the BDUs’ business model. Will the American specialty services accept this new reality, or reduce their fees to help Canadian BDUs with repackaging scenarios? It will be interesting to see how this unfolds as no one is talking on the record yet.
