I might do the same thing if I was a cable company with a couple hundred
subscribers.
Or maybe only carry channels I could get free or cheap.
They ought to be able to carry a few gbps on their coax if they dropped
TV and ran DOCSIS 3 on every channel.
----- Original Message -----
*From:* Jay Fuller - Cyber Broadband Inc
<mailto:[email protected]>
*To:* Cyber Broadband Inc. <mailto:[email protected]>
*Sent:* Thursday, October 02, 2014 12:42 AM
*Subject:* more cable companies cut the tv cord
More Cable Companies Take TV Off Menu
4 hrs ago - AP
A growing group of small cable-TV providers are realizing that both
they and their customers can live without expensive TV channels.
Of the 100 million homes in the U.S. that subscribe to pay TV, about
14% are served by smaller companies that have a million or fewer
customers. In some cases, they serve fewer than 100. Faced with rising
programming costs, some of those companies---such as Ringgold
Telephone Co. in Georgia and BTC Broadband in Bixby, Okla.---have
pulled the plug on TV service altogether, preferring to simply focus
on Internet and phone service.
Others, meanwhile, are dropping major groups of channels to manage
their costs. The latest is Suddenlink Communications, an operator that
serves about one million customers, which says it plans to dropViacom
Inc.'s TV channels, including Nickelodeon and MTV, at midnight
Tuesday. Suddenlink says it has already signed long-term contracts
with other channels to fill the Viacom channels' slots.
The shift poses a potential threat to big media companies. These cable
providers are tiny compared with industry titans like Comcast Corp.,
but the fees they pay media companies for rights to carry programming
add up. Cable channel owners---which include major media companies
such as Walt Disney Co. and Time Warner Inc.---this year will collect
a total of $35 billion in license fees, according to SNL Kagan. But
that figure could erode if more small players give up on offering
customers the big TV bundle.
After seven years of selling customers cable-TV services, BTC
Broadband got out of that business late last year and now provides
just broadband and phone services. The Oklahoma company, which had
been serving about 420 TV subscribers, decided it simply couldn't
afford to keep paying rising fees to carry a basic lineup of channels
including ESPN, TNT and MTV.
BTC President Scott Floyd estimated that if the company continued to
pass on rising programming costs to consumers and maintained its thin
profit margins, by 2016 cable-TV bills would rise to $130 from about $60.
"I think the TV model is broken," said Mr. Floyd.
In five years, operators representing about 5 million pay-TV
subscribers---5% of current pay TV households---will "no longer be
doing business the way they do today with video," estimates Rich
Fickle, chief executive of the National Cable Television Cooperative,
a consortium that negotiates programming deals on behalf of about 915
small cable-TV providers.
A loss of 5% of households in a few years could shave off about $2.4
billion in revenue for basic cable networks alone, which by 2018 would
be raking in about $47 billion in carriage fees, according to SNL
Kagan estimates.
"The change in the market is going to come from the bottom," said
NCTC's Mr. Fickle. Bigger pay-TV companies like Comcast and DirecTV
aren't likely to make similar moves away from pay-TV service, he said,
because they enjoy better profit margins and are busy pursuing big
mergers.
Some operators say they are gradually being pushed out of the TV
business as subscribers drop their expensive TV subscriptions and
watch shows on cheaper Internet video services.
Those who have exited completely say that while many customers
switched to satellite service, a growing number simply migrate to
online video.
Missouri-based Boycom Cablevision Inc. has sold cable-TV service since
the early 1990s, but now counts only 1,000 TV customers out of its
total 5,000 subscribers. "We have truly morphed into a broadband-only
provider in a lot of our markets," says Patty Boyers, co-founder of
Boycom.
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."
Since 2008, small telecom companies representing about 53,000
customers have shut off cable-TV services or gone out of business,
according to the NCTC. Over the last three years, the number of
customers affected by such decisions has accelerated.
At least one midsize operator, Cablevision Systems Corp., 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.
Some media executives shrug off the threat, saying that cable-TV
providers have been complaining for a decade about programming costs.
They say their businesses don't face any real risk from the small
companies that have been disconnecting service thus far.
Media companies could get ahead of any broader decline, cable-TV
executives say, by changing their model of selling full bundles of
channels to operators, and instead selling just their popular channels
in smaller bundles or on an a la carte basis---something they have so
far resisted doing.
Many small operators are cutting back on expensive TV channels they
don't view as vital to include in their packages, as Suddenlink says
it is planning to do. Earlier this year, providers representing some
900,000 households opted out of an NCTC-brokered carriage deal with
Viacom, choosing instead to drop its channels.
Those operators had braced to lose as much as 10% of their customers,
but overall they have lost less than 2% of their base, according to
the NCTC.
Mr. Fickle says other members are emboldened by the Viacom episode and
may take a similar approach in deals with big programmers that are
coming up for renewal with the NCTC, if the terms don't make sense for
them.
Operators' shift away from TV could accelerate if more customers fed
up with rising bills "cut the cord" themselves. Last year, the pay TV
industry contracted for the first time, losing 167,000 customers as
people disconnected service, according to MoffettNathanson research.
Several small operators believe the pay-TV model will splinter and
reset itself online, with TV channels and big distributors such as
Comcast or Dish Network Corp. selling programming directly to
consumers through apps, much like Netflix does today.
Such a reality has long been considered a threat, but executives like
Steve Weed, CEO of WaveDivision Holdings LLC, a West Coast cable
company, envision a new business opportunity for small cable operators
to supply customers with Web TV boxes and manage a storefront of
streaming-video apps.
Dealing with customer complaints about TV service---which account for
most service calls---would be a thing of the past. "We'll go from
being the bad guy to the good guy," Mr. Weed said.
http://www.msn.com/en-us/money/companies/more-cable-companies-take-tv-off-menu/ar-BB6Hl0Z
