The CEO of Sling TV, the $US20 per month internet TV service aimed at “cord cutters” — those who’ve ditched their cable and satellite subscriptions to watch TV online instead — seems more concerned with broadband monopolies than he is with competition from the largest tech company in the world.
Roger Lynch, who has headed up Sling TV since it launched earlier this year, told Business Insider last week that he’s “quite concerned” that cable companies, like Comcast, Time Warner Cable, and Charter, could respond to the growing trend of cord cutting by jacking up the prices of their broadband-only subscriptions.
“They have their dominant — in many cases monopolies — in their market for broadband, especially high-speed broadband,” Lynch told us in an interview, adding that it’s actually cheaper sometimes for people to subscribe to TV and broadband from a cable company than just subscribe to broadband.
The cable companies, Lynch said, “concern us because they’re using their dominant position to try to thwart over the top services.”
Streaming video through so-called over-the-top services, like Netflix, Hulu, and the recently-launched HBO Now, is on the rise, while traditional TV viewing is declining. Subscriptions to pay TV providers, like Comcast, Time Warner Cable, DirecTV, and Dish, which is the parent company of Sling TV, were down 0.5% in the 12-month period ending in March, according to the media research firm MoffettNathanson.
At the same time, the number of households in the US that pay for broadband-only is increasing.
But people who cut the cord must still, of course, rely on a broadband provider, and often that’s the same company that they would pay for TV. One of the ways that these cable companies could make up for declining TV subscriptions is by raising the price of broadband-only subscriptions.
And since nearly 75% of the country has only one option — or fewer — for broadband, they will have no other choice than to pay up.
Lynch said that it was the job of the Federal Communications Commission to “protect consumers” and “make sure there’s innovation and competition in video,” adding that he thinks the Comcast and Time Warner Cable Merger was “appropriately rejected.”
“It would have created way too much power in one company’s hands,” he said.
Lynch, who made his comments to us after he spoke at the Northside, a music, art, and technology festival in Brooklyn last week, also said he wasn’t worried about Apple, which is rumoured to be working on its own internet TV service that will reportedly launch in the fall.
“Anybody who’s in an industry that Apple enters, you need to be concerned about what they’re going to be able to do,” Lynch told us. But, he said, “for the medium term it’s going to help our business because it’s going to create much more awareness, and it will expand the market much faster than we could ever expand it. So that will certainly help.”
Lynch added that “in the long term it’s going to be about competing in the marketplace with far fewer barriers to entry.”
Because Sling is owned by Dish, the huge satellite provider, which has existing relationships and leverage with TV networks, it has an advantage over any company that’s not in the industry, Lynch said.
Apple is reportedly negotiating with both local and national networks to include their programming in its service, which could delay the launch.
But Apple has a history of upending already existing industries with new products and services. It remains to be seen whether it will be able to do that with TV.
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