Advanced Television

Analyst: Cable TV resisting online threat

June 18, 2012

By Colin Mann

According to Bernstein Research, US cable television providers are generally resisting the threat from online services, although the latter have added viewers and services.

One factor that has helped maintain cable subscriber levels is that certain programming such as live sport, is not available online, with other shows that are online not easily streamed to a television.

“Consumers love live sports, specials and first-run scripted content,” noted Carlos Kirjner, a senior analyst for Bernstein in a research note. “We think this goes a long way in explaining why we have not seen cord-cutting as Netflix subscribers and usage have grown and as other providers of long-form video content over the Internet have emerged.”

The two major sports in the United States have different approaches to online match availability. The National Football League does not offer most of its games online. By contrast, Major League Baseball (MLB) sells subscriptions that allow fans to watch games on various devices. But MLB blacks out local broadcasts from those online subscriptions. New York Yankees fans in greater New York would still need a cable or satellite TV subscription to watch their favourite team.

Kirjner does not expect many subscribers to cancel their cable subscriptions imminently, even if they are paying separately for an online service such as Netflix.

“Consumer preferences, content economics, technology and industry structure all have conspired to limit the impact of the Internet on how TV is consumed in the US, and will probably continue to do so in the foreseeable future,” he suggested. “This is the case in large part because pay-TV providers want to control as much as possible of the user experience.”

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