Tumblr Icon RSS Icon

Which Networks Would Die If Cable Went A La Carte—And How We Could Get Standalone HBO GO

Posted on  

"Which Networks Would Die If Cable Went A La Carte—And How We Could Get Standalone HBO GO"

Share:

google plus icon

The biggest argument people who support the cable business model—or think it’s inevitable and immutable—make is that a lot of channels would go out of business if consumers had to select them individually from a menu rather than getting them as part of a bundle that subsidizes their production. I tend to be all right with that scenario, not because I want to see people lose their jobs, but because I’d like to be able to direct more of the money I spend on the bundle on the specific channels that are most important to me, and to see companies like HBO unmoored from the most restrictive terms of their engagement with the bundle. Now, a new study from Lazard Capital Markets and Clear Voice research provides some sense of the networks that inspire the most loyalty in consumers—and would be most likely to survive the end of the bundle era—and which inspire the least. Via The Hollywood Reporter:

The index found that 38 percent to 43 percent of consumers would cancel or switch their pay TV service if they lost top broadcast networks. More than a third would cancel if they lost ESPN, the top cable channel in terms of viewer loyalty. And 29 percent would cancel if they lost the second-ranked cable network, Discovery. Despite recent ratings challenges, Viacom reached an average cancel rate of 15 percent, led by its Comedy Central (20 percent) and Nickelodeon (19 percent).

And Deadline has more details:

As you might expect, the Big Four broadcasters, ESPN, Discovery Channel, History, USA Network, and TNT have the most dedicated followings. (At the bottom of the list: OWN, Fox Soccer Channel, CNBC, Oxygen, and CMT.) The problem for Disney is that its channels aren’t popular enough to continue to justify the nearly $8.4B a year they currently generate from program fees — about 26% of pay TV’s total programming outlays. Crockett figures Disney’s take could drop 65.2% to $2.9B a year. Other potential losers include Time Warner (not including HBO) which could see yearly payments fall 28.6% to $2.5B, and News Corp (not including its regional sports networks) which could slide 23.2% to $2.8B. But CBS (not including Showtime) could be a big winner in an a la carte world with payments +454.2% to $1.5B. It’s followed by A&E (+168.6% to $1.9B)m Scripps (+164.3% to $1.4B), Discovery (+153.1% to $3.1B), AMC Networks (+87.1% to $782M), NBCUniversal (+66.0% to $4.2B), and Viacom (+1.4% to $3.3B).

I don’t see the end of the bundle coming immediately, but if studies like this continue to suggest incentives for a new model, we could see the beginning of carriage negotiations that could win the networks more freedom. I actually think that might be how we get something like stand-alone HBO GO, as part of a negotiation where cable companies become willing to give the premium networks like HBO and Showtime more freedom to distribute their content in order to preserve at least some of their cable subscription revenue.

Tags:

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.