ASPEN, Colo.--Cable subscribers who are looking for ways to shrink their cable subscription package--dubbed "cord shavers"--should be a much bigger concern for traditional pay-TV operators than cord cutters, according to a panel of experts speaking at the Fortune Brainstorm Tech conference here.
"People are buying smaller bundles," said George Kliavkoff, president of Heart Ventures. "That's why we are seeing [Dish's] SlingTV and Comcast's announcement," Kliavkoff said, referring to Comcast's (NASDAQ: CMCSA) revelation earlier this week that it is planning to launch a $15-a-month OTT pay-TV service that blends streaming of the major broadcast networks and HBO, as well as access to the MSO's cloud DVR service and thousands of on-demand programs.
Kliavkoff's comments echoed a Wall Street Journal report from last fall, which found that a growing number of pay-TV customers are signing up for smaller, cheaper bundles of channels that cost in the range of $10 to $50 and don't include the priciest networks like ESPN and TNT, which have seen their distribution footprints drop 4 percent or more over the last four years.
Kliavkoff, who was part of a panel of experts discussing the future of TV viewing at the conference, also said that the big winner in the new "golden age" of television is the consumer. "Consumers are watching more video content every year and they are paying more," he said, adding that it's also a great time to be a programmer. "This is the best time to sell content. There were 400 new series approved and greenlit this year."
That sentiment was echoed by Paul Rehig, senior vice president of business development at AMC Networks, who added that in 2006 fewer than 100 new series received the go-ahead to be made, which means that in nine years the number of new series being made has grown four times. "There's been an explosion in creative and it's coming from programmers that need more hit shows," he said.
Interestingly, Rehig said that AMC is not only seeing more business from its U.S. distribution partners, such as the pay-TV operators, but it's also seeing a lot more business from international sales and distribution and digital sales. Rehig said that AMC's hit show "The Walking Dead" has not only attracted interesting from international distributors, but also has generated a lot of revenue in digital sales. "We are making great money from iTunes and Netflix by selling that show," he noted.
However, Rehig also commented that while digital brings in additional sales, he believes that big shows like "The Walking Dead" will always make their debut via traditional distributors like pay-TV operators to get visibility.
Despite the growing number of distribution channels--whether pay-TV, OTT or mobile--most panelists agreed that the each distribution channel is important and will generate a new type of content. According to Amy Banse, managing director of Comcast Ventures, her group is making investments in digital content companies because they believe they have the potential to become the next ESPN. "Broadcast didn't go away because of cable," Banse said. "Cable won't go away because of digital. It will all exist and all will fight for their share of the pie."
Related articles:
Comcast to answer Sling TV with $15-per-month OTT pay-TV service, Stream
WSJ: Consumers not cutting the cord, they're 'shaving' it