Tuesday, February 21, 2012

Broadcasters Do Not Prefer Cordcutters

Today's WSJ article may be all about the rise of cord cutting, but it may not be in the best interest of broadcasters. Sales of digital antennas are expected to double this year and OTT providers like Boxee and Aereo are offering online streaming of broadcast channels. And consumers, eager to lower their video bills, may cut the cord to cable, as these alternatives gain speed.

But it may not be in the broadcasters' best interset to encourage non-cable reception of their programming. One simply has to look at the ownership of each network to understand why. ABC owns a ton of cable properties including Disney, ESPN, and others, all getting a monthly subscriber fee. NBC is owned by Comcast, the largest cable operator, and also owns multiple cable networks as well. Fox owns regional sports networks, FX, Fox News and more. And while CBS spun off its Viacom properties (MTV, VH1, etc.) it still retains Showtime and CBS Sports Network. And even Univision, a Spanish broadcast network, distributes cable network. Plus each of these broadcast networks get their own monthly license fee for cable distribution. Why would they want to encourage cord cutting.

And the government may also make it hard for consumers. "The value of spectrum used by broadcast TV has been hotly debated in the past couple of years, as the FCC has looked for ways to add spectrum for wireless broadband. Last year FCC Chairman Julius Genachowski said the percentage of viewers watching broadcast over the air, rather than through cable or satellite, has fallen to less than 10%, in contrast to the precable-TV days when it was 100%." While those spectrums help wireless, they hurt over the air reception. Will broadcast TV access be available to only those that can afford to access it?

The money is in cable TV and authenticated web viewing. The profits on over the air and OTT are less enticing. And broadcasters are more likely to do what ever they can to impede cord cutting and support this cable model.

1 comment:

  1. I can still get my broadcast channels from my pay TV provider; DISH offers locals in all markets. That of course is not something that companies like Netflix can claim. This is the reason I could never be one to cut the proverbial cord and go to a streaming only option. I have world class equipment, the most national HD channels, and as a DISH employee I know it’s also the industry lowest everyday price. With a cord cutting company, I pretty much older movies and a show here or there.