There are no shortage of issues faced by video service providers, some of which are fundamentally changing the business model for pay-TV. Rising programming costs, changing program access rules, and a shift to broadband delivered distribution are just a few. We interviewed Rich Fickle, CEO of the National Cable Television Cooperative (NCTC), Matt Polka, CEO of the American Cable Association (ACA), and Robert Gessner, President of MCTV and Chairman of ACA to gain a better understanding and appreciation for these challenges to the traditional video business.
Rising Programming Costs
Rising programming costs are high on the list and it is causing some traditional cable and IPTV operators to rethink their participation in the legacy pay-TV business. “The difference is, now some cable operators have said I can’t do it, I can’t justify the cost of certain programming from a large media company and have decided not to continue,” said Fickle in the below interview at the recent BroadbandVision show. “That basically says, gee, we’ve hit the wall on some of these deals.”
Fickle puts the issue of rising video programming costs into great context, providing unique perspective from the largest buyer of programming for independent cable providers.
Changing Program Access Rules
Not only are costs rising, but program access rules are changing as well. Two recent FCC inquiries into sports programming blackouts and online video distributors potentially getting access to cable channels highlight some of these changes.
“It does raise a lot of interesting issues related to greater competition,” said Polka. “This could actually bring back Aereo into the picture as an OVD, subject to MVPD rules like retransmission consent and other things.”
Polka highlights recent FCC moves with regards to program access rules and their implications for video service providers in the below interview.
“More of a Broadband Company than Anything”
Robert Gessner, President of Ohio based rural cable provider MCTV (and chairman of ACA), thinks smaller cable companies will increasingly begin to think of themselves as a broadband company first, and a TV provider second, if at all, at least in the traditional sense.
“Linear television is still important for us, but it’s becoming less and less so with shrinking margins, higher costs and general unaffordability for customers,” says Gessner in the below BroadbandVision onsite interview. “Which forces us towards that Internet model more than television.”
Gessner shares this and other perspectives, including an introduction of the concept of “A la Bundles,” in the spirit of “A la Carte” program choices, which he feels may help solve the business challenges faced by small cable operators.