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Home / Articles / Blog / Cord-cutting, A la carte, sports channels
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30
January
2013

Cord-cutting, A la carte, sports channels

Cord-cutting is proceeding apace at the beginning of 2013.

According to a new survey from Nielsen Wire, homes with broadband Internet and free, broadcast TV are becoming a growing trend, increasing by 22.8 percent during the last year.

The number of homes subscribing to wired cable has decreased 4.1 percent in the last year, while telephone company-provided and satellite TV subscriptions have seen increases of 21.1 percent and 2.1 percent, respectively.

Although the portion of households with both cable TV and broadband Internet subscriptions still hovers around 70 percent nationwide, that figure could change considerably given how many more (and cheaper) options consumers have these days.

http://blog.nielsen.com/nielsenwire/online_mobile/report-how-americans-are-spending-their-media-time-and-money/

Meanwhile, SNL Kagan predicts that by 2018, retransmission consent fees paid by cable ops pay to carry local TV stations will have ballooned to almost $5 per sub per month, or about what they pay now for ESPN, the poster-channel for escalating sports programming fees.

This means that pressure on cable companies to offer a la carte programming menus is increasing – a development that would add some much-needed competitiveness to cable television markets.

About a year ago, Time Warner Cable executive Glenn Britt told the Wall Street Journal: "What was a minor problem is turning into an astronomical problem. The ultimate solution is to get that programming on some sort of smaller packaging scheme." – In other words, a la carte programming options.

Ironically (given the fact that the cost of sports programming is the primary driver being the increasing costs of cable content) Time Warner just signed a deal with the Los Angeles Dodgers to create a new regional sports network, SportsNet LA – which is expected to be sold at around $5 per month.

Time Warner's schizoid attitude is emblematic of the double-bind that increasingly characterizes the cable television business – in order to preserve or expand its subscriber base, the cable op must offer the same sports programming that is driving cable rates upward toward a tipping point that could destroy the cable content distribution model altogether.

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