Skip to main content

It’s a SVOD World After All

The Independent Show, slated for July 29-Aug. 1 at The Disneyland Hotel in Anaheim, Calif. comes as the cable industry is in anything but the Happiest Place on Earth. Cord-cutters, cord-nevers and cord-shavers continue to chip away at traditional TV, while Wall Street is turning its attention to subscription video-on-demand companies like Netflix, Hulu and Amazon Prime Video. But some operators — especially small and midsized cable companies — are embracing OTT and SVOD competitors, bundling offerings with broadband service and a smattering of traditional video to retain customers on the cusp of leaving and hopefully drawing new ones in. National Cable Television Cooperative president Rich Fickle spoke with B&C about these issues and more. Edited excerpts follow.

What do you see as the biggest issues facing operators now? Is it more of the same — programming costs — or is there something new to worry about?

The issue is really the video pay TV model. At the heart of that is a couple of things: one of them is programming costs. The most top of mind for them is the last round of retrans, which resulted in super-high increases that most of these guys had to pass along to customers. It was a very painful retrans year for them. On the other side of it, you’re seeing demographics across the board shifting some or all of their viewing to other content sources. Operators now need to figure out, ‘Do you want to be just a carrier of that content through broadband or do you want to play a more instrumental role in fostering those services in a value-added player?’ A lot of what we are working on and talking to members about are those types of options and where they could choose to be more involved or less involved.

In-home WiFi is a really hot area because there are new developments with some of the leading partners, but also some new companies coming in. Home WiFi, to me, is kind of what the set-top used to be. It’s like the touchpoint to the consumer for a lot of services in the next three to five years.

You’ve seen a lot of smaller operators embrace OTT lately, offering access to Netflix, Hulu, Amazon and the like through their set-tops or via TiVo’s next-generation gateway. Is that where you see the business moving?

I do, and it’s not an overnight thing, but I think the model is kind of two broad paths. One is to start offering replacement packages that are OTT-driven — it could be Sony PlayStation [Vue], DirecTV Now, Philo TV — and it doesn’t have to be your whole base, it could be certain customer segments that see value in those types of choices versus what they offer locally. The other is additional content that is provided from the OTT side of the business, like Curiosity-Stream. We think there are maybe 12 to 15 really interesting brands out there that are good additions that provide diversity of content. But they’re SVOD models so they also provide notable revenue streams back to the cable operator. If you’re going to skinny down your traditional pay TV investment, this is a way to offer customers something new and also bolster the profitability of the business as you migrate toward all IP.

The Independent Show also is an opportunity for members to discuss the latest from Washington. What are the top legislative issues of concern?

Unfortunately, it doesn’t feel like there is a solid game plan to resolve the [retransmission consent] pain from a legislative standpoint. The rationale of net neutrality is still an ongoing effort by the ACA folks and others; pole attachments in some parts of the country are still a barrier to expanding broadband. There are things on the antitrust side that are interesting — the appeal in the AT&T Time Warner case, we are very interested in understanding that and, if the opportunity allows, providing some input into it. The consolidation of large content companies like Disney and Fox, I think, has some risks and negative impact on the marketplace. Regulatory-wise, I think those are very important agendas for us to pay attention to. The FCC is taking a different look at the Sinclair-Tribune merger, based on things we’ve seen in the news in the last few days. I think that’s healthy.

More of this conversation will appear in the Independent Show Daily,produced by Multichannel News and distributed during the convention inAnaheim.