The weak economy is leading cable operators to reverse their opposition to so-called “a la carte” programming. Comcast and Time Warner have lost 1.2 million customers in the last 12 months.
Programming costs have risen 6-10 percent annually over the last decade. And the fear is that it will continue as they see ESPN, for example, sign a $15 billion, 8-year deal with the NFL. Cable and satellite operators are also now paying to retransmit local broadcast channels.
“There is a growing recognition that the current model is broken,” says Craig Moffett, cable analyst at Bernstein Research. He expects smaller, less costly programming packages to emerge as Time Warner is doing with its TV Essentials pack.
“The specter of unbundled programming is likely to encounter fierce resistance from network owners such as Viacom Inc or Discovery Communications Inc, which are keen to maintain the economics of selling their most popular channels as a package with their smaller, nascent networks,” reports Reuters.
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