So let me back up a little bit. For most of the 1990s and 2000s, cable and satellite providers fought to provide ever larger groups of channels. DIRECTV’s rallying cry, in fact the thing that brought me to them in the first place, was that they had over 200 channels while my local cable company had 45.
This was typical at the time and growth in channels continued unabated until about 2010 when it could be said that more or less every company provided more or less every popular channel. Sure, you might go to “this company” because they had one specific channel you wanted, but for the most part, and with the exception of sports channels, everyone was about even.
Then, customers figured out that their bills had about quadrupled in ten years.
Suddenly, the rallying cry changed. People wanted “a la carte,” the ability to choose the roughly ten channels they actually watched and pay only for those. The problem was that the economics of that didn’t pencil out. The popular channels, sold by themselves, would have been too expensive. Think about it today – if you want HBO NOW, you pay $15 a month for one channel. So those voices quieted and waited for something better.
By 2015, that “something better” arrived, and it was called “the skinny bundle.” Somewhere between 30 and 50 popular channels, for a price you could afford. Skinny bundles came to cable, satellite, and in a high-profile way, to streaming. The only problem now, is people are still saying “skinny bundles” are too expensive. And trust me, that’s a real problem.
According to Karl over at DSLReports, a recent TIVO survey says people really want to pay under $2 a month for a popular channel like ESPN, AMC, or HGTV. The massive problem with that is, those popular channels aren’t going to sell for that price. It’s a well-known fact that ESPN by itself costs cable and satellite providers $8 per subscriber per month, implying that if it sold directly to consumers it would cost $12 or more. Every time we see a standalone live channel launching, it’s always over $6 a month, and there hasn’t yet been one case where a live streaming channel has been available for under that price.
That survey goes on to say that people think they want to pay under $30 per month for live TV. The simple fact is, that’s not sustainable today. Today’s premium TV programs cost millions to produce per episode and that’s impossible to do if your income base shrinks like that. People want all the good TV at a price that was impossible even 20 years ago.
If TIVO’s study is right, it paints a very grim picture for live television services in the years to come. Recent studies have suggested that over 40 million households could cut the cord in the next 5-7 years and that would essentially collapse the established order in television. No wonder companies like AT&T and Comcast are rushing to get streaming services on the air.
Of course, there is already a way to get dozens of live channels for free, and that’s an over-the-air antenna from Solid Signal. After a one-time investment, you’ll get all the free TV you want for the price you’re willing to pay. Then, you only have to worry about paying for premium channel and on demand content, and who knows, maybe you can put something together for that magical $30 a month number.
It does seem to me that people wanting the kind of premium TV they get today for only $30 a month is a little ridiculous. I recently read that the last season of Game of Thrones will cost $15 million per episode to make, and the only reason that’s possible is the large number of people paying for HBO. If people want to keep getting these massively expensive shows, they need to rethink their expectations.