Moving Towards “TV My Way”

There’s a really big change afoot for television viewers….even bigger than 24 hours a day of Oprah Winfrey and her favorite people and/or things.   No,  its not 3DTV nor is it a refined internet or mobile viewing plaform. 

What is it?  Its a chance to lower your TV bill.  You read that right…. lower the cost.  Late last week, Time Warner Cable announced a new product offering that will actually cut the cost of your television bill. 

TWC‘s  “TV Essentials” is a video only, lower priced, limited channel offering that is being tested in New York and Northeast Ohio with further launches planned for 2011.

This from the TWC press release announcing the package…..

The Time Warner Cable TV Essentials package includes:

Time Warner Cable’s Basic tier (including local channels from ABC, CBS, Fox, NBC and PBS) 12 of the top 20 Nielsen-rated cable channels, plus other channels Representative channels from each major genre: news/information, sports, kids, music, lifestyle, shopping, and general entertainment Two standard-definition digital cable set-top boxes, featuring an on-screen guide and Music Choice Enhanced TV features including StartOver(TM) and LookBack(TM) (where available) Access to the library of new release movies through Time Warner On Demand (paid VOD only; no free VOD)

The package, valued at $49.99 per month, will be discounted to $39.99 per month in New York City, and $29.95 per month in Northeast Ohio, for a promotional period of 12 months.

 “We understand that people are under pretty serious economic duress and would like to have more choice and the option of paying for less programming,” said Glenn Britt, President, CEO and Chairman of Time Warner Cable. “This video-only package isn’t for everyone, but we hope that some of those most hard-hit by the current economic conditions find it to be a helpful option.”

The reason for the move is fairly straight forward.  SNL Kagan reported last week that overall cable tv subscriptions declined for the second consecutive quarter this past summer, the first time that has occured since Kagan began tracking the data in 1980. Interestingly, telcos and satellite distributors posted subscriber gains while old-school cable providers shouldered the entire decrease. Overall, paid tv subscriptions declined by 119,000 last quarter, the largest drop Kagan has ever reported. 

Some say the writing has been on the wall for sometime. Price increases, battles with content providers over costs and limited flexibility and options had to have an effect at some point.  Several studies have cited the state of our economy and high unemployment as the reasons for the shift.   Data also shows that consumers aren’t cutting the cable cord in favor of online programming just yet.  Internet viewing remains low and is having a minimal effect on the industry while the key stakeholders seek a fair business model for all parties. 

I love what “TV Essentials” is trying to do and congratulate TWC for leading the charge in not just recognizing that consumers want more choices, but then doing something about it.  Obviously, TWC can’t make this move alone and to Britt and his team’s credit, they have found a way to bring the major content companies into the fold. Time Warner, Disney, NBCU, Viacom, Scripps and others earn revenues from sub-fees and advertising…and any decline in distribution, and then viewership, for some of the multiple channels they program and are not included in a stripped down TV package will only harm their ad revenues, beginning Day One.  

My guess is that all parties involved recognize that ad revenue declines are a given and have appropriately increased distribution fees on each channel in “TV Essentials” when compared to their more comprehensive packages to counter balance the ad shortfall.  That seems fair to me. As the ultimate bill payer, I may pay more for Cartoon Network in “TV Essentials” than in a digital basic 400 channel package, but my overall out of pocket monthly cost declines with the decrease in channels overall.  I still win.

As positive as this development is, I am going to hope it is just the first step. As consumers, we have become conditioned to expect maximum choice and flexibility.  And that is where “TV Essentials” falls short.  TWC and the content companies have decided what channels will be offered in “TV Essentials”, not me, and accordingly “TVE” only begins to scratch the itch that screams for what I call “TV My Way”, the ultimate in consumer choice and flexibility. 

I am waiting for TV providers to allow me to pick the channels I want….a la carte….and scrap the bundling and packaging of services. I understand the challenges that face all conent providers….who need maximum distribution of their services to earn the largest subscription and ad revenues. But that doesn’t mean I want to pay to make that happen. Give me choices and let me decide, not you Mr. Cable operator.

In my house, with two teenagers, my wife and I, we watch roughly 18 of the 85 channels that Cablevision provides us in our basic package and pay about $70.00 a month for the privilege, with recorders and remotes included. I am waiting for the day when we can simply choose the channels we want and nothing more. If that means that the cost of ESPN in my home needs to jump from $4.00 a month, to $4.40 or $5.00, and I can stop paying for A&E, ESPN News, ESPNU, History, Syfy and a host of other channels to save money, that might be a deal I can handle.  Its pure math. 

I am sure there are many people examining “TV My Way” type concepts….certainly folks smarter than me….and they have probably figured out what the costs and concept would look like. So what do you say TWC, Cablevision, Cox, Comcast, Disney, FOX, Viacom, Time Warner  etal.  Give it a rip. Let us try it out so you can pull together some key learning…..massage it a little and then get us something that can stick. It’s time and we’re ready.

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