Cablevision CEO James Dolan thinks we will see a 20% to 25% reduction in big bundle cable packages over the next five years, The Wall Street Journal reports. Customers will either be downsizing to smaller packages of channels, or cutting the cord altogether in favour of online video, he said.
Dolan doesn’t see this as a problem for popular channels, who he said will do “just fine.” Especially channels like HBO with lots of original content and a cult following. But niche channels, which have so far survived by being thrown in with more recognisable channels, will suffer. If you don’t have a strong brand identity, you’re going to be in trouble.
Iconic channels like HBO and Showtime seem to be banking on this digital shift favouring them, as both have debuted their own online services that go directly to customers. And Dolan said he predicts these direct products are going to become “more and more attractive to customers.” But how many of these is one person going to subscribe to?
Higher-margin broadband service is one area where Dolan thinks operators like Cablevision can make up the difference, as he thinks the loss of subscribers will certainly have some effect. Perhaps a shakeup in business model is inevitable in an industry that has never been adored by consumers. Americans’ satisfaction with their cable TV and internet service providers recently reached a seven-year low.
Companies like Cablevision are trying to experiment. In late April, it debuted a “cord cutter” package specifically designed to lure back those who have been leaving its service in droves. It features premium Internet (50 Mbps downloads) along with a digital antenna so they can watch over-the-air TV. No cable.