Cable Cuts Its Own Cord

For the longest time, TV specialty channels have been the success story of our industry. As traditional networks struggled with the problems of trying to satisfy a vast number of demographic and regional viewing habits, the specialties have been able to establish goldmines in their individual niches.

What’s more, unencumbered by the content controls that “censor” network programming, they’ve been able to launch the widely recognized “New Golden Age” of TV programming.

But a few weeks ago, an American study on television revealed the one potentially life-threatening chink in Specialty TV’s armor-plated business model. It relies on repeats.

Now repeats have always been a reality in television. They’ve meant that no broadcaster needs to program original content all year round or 24 hours a day.

Even such Blue Chip Specialties as HBO spend most of their broadcast hours re-running the shows people paid hefty subscriber fees to see in Prime Time as long as a decade ago.

The Canadian Specialty model is even more repeat heavy with the same shows running on tier after tier of every conglomerate’s myriad of channels until their cost has been amortized more often that a one bedroom bungalow in Vancouver.

But this study found that we’re now living in a world with so much new and “Original” programming that nobody has to settle for repeats anymore, so viewership in repeat hours is plummeting.

It’s plummeting further among those who’ve opted for a set-top box like AppleTV and Roku, where new content libraries (many of them free) seem to appear on a monthly basis.

Studios, recognizing that trend, are already licensing their product for Netflix, Amazon Prime and the like, making the viewing windows for their content either limited or completely unavailable to cable channels.

As a result of all this, in the last US Quarter alone, 305,000 Americans cancelled their cable subscriptions, cutting the cord and most likely saving a ton of money without losing either couch time in front of their screen of choice or entertaining content to fill that time.

And now it seems, even cable companies are beginning to free themselves from the bundled world of repeat programming that no longer meets the needs of their customers.

Opting for something they’ve dubbed “Virtual Cable”, DISH Network will begin providing channels via the Internet by the Fall of this year.

Deals already done with major content providers mean that DISH will offer Internet subscribers channels like Disney, ESPN and History without all the lesser (and most repeat heavy) channels they are normally bundled with.

Viewers will no longer have to purchase Fox to view CNN or vice versa; or pay for a bunch of reality channels in order to get TCM or AMC.

It all indicates that the age of Bundling is quickly coming to an end, and maybe even the age of Specialty channels and Networks.

While the CRTC will gather in its windowless rooms next month to contemplate saving our broadcast entities and production finance models in an unbundled future, we’re at the point where you can pay for only what you actually watch and not to finance all those channels that you don’t.