You Think You’ve Got Problems: MTV and Pay TV Under Huge Stress

The trickle of pay TV subscriber erosion turned into something of a stream in Q1, as the industry scrambles to re-think. One solution? Kick MTV and its peers out of the basic cable package…

MTV logoBy Paul Marszalek

From the misery loves company department: As radio continues to report lackluster Q1 results, the quarter was even nastier for pay TV operators.

In their worst quarter ever in terms of subscriber losses, operators lost more the three quarters of a million subs – according to firm MoffettNathanson as reported by Fast Company. That’s five times the losses experienced last year at this time.

Do the math: 762,000 cord cutters X 12 payments per year X pick a number — conservatively $60 a month average? That’s more than a half billion dollars in annual lost revenue, just from cord cutting in the first three months. This, of course, does not count any additional losses due to cord-shaving, where subscribers downgrade to lower tiers.

Cable losses

While pay TV is still a behemoth, with more than 85% of all households still paying, the head-scratching has begun, with more and more consumers asking themselves if they’re getting any bang for their buck.

Just as music consumers dumped $18 CDs in favor of stealing just the good songs, pay TV subscribers are dumping bundled quantity for on-demand quality channels in the form of Netflix and Hulu.

The knock-on effect at pay TV is already here — ESPN, at $6-7/month is being sliced out of packages to lower costs. And in a stunner last week, Viacom’s MTV, VH1, Comedy Central, and others were bounced out of the basic cable tier by Charter — the country’s second largest pay TV operator. Ouch.

Where does it lead?

Well, you might recall the recent moves by the new FCC to remove net neutrality rules. This would allow Comcast and others who own the pipe to your house to not only jack the prices for that service, but block or blunt new players in the space, such as PlayStation Vue, YouTube, Netflix and others. Likely, your broadband fee skyrockets while the providers start throwing in channels “for free.”

Filed Under: Actual NewsFeaturedNews


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