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By Paul S. Maxwell
Programmers everywhere are a bit excited that the RBOCs are--once again--on the video prowl.
Twelve years ago, "cable" programmers gambled on a handful of visionaries looking to the skies and cut distribution deals--federally mandated at cable carriage rates in the '92 Cable Act--and reaped the rewards (short term with PrimeStar and AlphaStar, long term with DirecTV and EchoStar and, Chuck hopes and prays, Voom).
Now, bean counters in media towers are salivating at a future of continued distribution gains from telcos entering the market.
I wonder.
This time, there's no law that says the no-longer-just-cable programmers have to sell at the same--or similar within spitting distance--rates.
This time, I'm not so sure there's a big upside in distribution to be gained.
When DTH debuted, it had a low-hanging-fruit universe of about 2.2 million very big backyard dishes to upgrade and a few million homes not reached by cable (there's a little more than 260,000 C-banders left).
And for years, a few smart "cable" programmers (notably in the beginning: HBO, Showtime, ESPN and CNN, later smart guys like Scripps and Starz) capitalized on the growth in TVHH added. Later, all did as well.
To a point.
Some statistics lately show an American household growth of a little more than 1% a year. Which gives us about 115 million homes with running water and, presumably, television of some sort. About 108 million have landline telephone service (for now).
And we've got about 24-plus million DTH homes and about 69-plus million cable homes, counting overbuilders.
With, in my guessing, about a 5% overlap or duplication that leaves some 87-plus million separate paying TV homes. My guess, of course, is just a guess. Some think the overlap (or homes subscribing to both cable and DTH) is much lower; some think much higher. The range, though, is from 83-plus or so to 93-plus or so. Close enough for guesswork.
Cable operators managed to keep growing as DTH started, but along about '99 started to show real subscriber losses, and that's lasted until just the last couple quarters for all but a handful of operators.
That marked the beginning of the dreaded Zero Sum Subscriber Game.
Suddenly, new Lifetime--for example--subscribers weren't new...they had been cannibalized from cable. Or, in a few instances, brought back to cable from satellite.
But I wonder how many programmers changed their incentive programs for affiliates to reflect the changes? I know a few have (Disney/ESPN for one). And I know a few others won't (Starz Encore...just look at what they've done, saturated satellite with lots of room to grow in cable).
But it might be time to remember from where the bulk of a programmer's subscribers do come: cable.
While "free" VOD (real VOD via cable) is a step in the right cable-centric direction...methinks programmers will need to do a bit more.
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| Anybody? Seen my skis? Red, white and blue skis from a long time ago...before helmets (well, not before an old WWII Air Force flight helmet and jacket a friend salvaged)...I was just feeling patriotic and nostalgic. |
And I wonder how many programmers will look at a truth behind any telco growth? Robbing someone to pay another...no gain, there.
But there is an upside for programmers...in two places.
One, everyone laughed at a few years ago.
Two, everyone gets but doesn't yet know exactly how it will work.
The latter is, of course, broadband per program distribution for a fee. No matter whether the cable operator plays here or not...a broadband subscriber has use of the broadband he pays for.
The former, though, is a real upside.
For example, at the CTIA Wireless 2005 show later this month in New Orleans, one of the keynote speakers will be Disney/ESPN's George Bodenheimer. He's paying attention to the 170 million or so cell phone subs...of whom more and more each day have the ability to receive streaming video.
Now, that's a nice potential upside. Back to this issue
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