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Is "Cable" Cooked?
20 Sep 2010 -
Credit Suisse sees big trouble ahead for "cable" ... as do a lot of other folks who believe that "cable" (as a handy, if somewhat misleading, synonym for the MVPD universe) will topple beneath the forces of Netflix, Google and the entire ravening pack of OTT self-servers.
In case you missed the news, Credit Suisse dumped all over on the MVPD media sector last week. Citing survey results that showed 30% of Netflix subscribers between the ages of 25 and 34 watch the streaming/mail order service instead of cable or satellite (or presumably telco) TV, CS analysts downgraded Disney, Viacom, News. Corp and Time Warner. At the same time, they upgraded their price target for Netflix by 56% to $140. Wrote CS, "Netflix's low cost, subscription streaming service is our biggest worry and could become 'good enough' for consumers with moderate income."
Not surprisingly, that walloped many MVPD shares as Time Warner Cable, Comcast and Cablevision all lost value across the week.
Interestingly, investors appeared more savvy than CS analysts as three of the four stocks named – all for companies with substantial programming assets which ... ahem ... is what powers OTT – showed upticks.
But never mind. The point I really wanted to make is one that TWC's Glenn Britt has voiced repeatedly, and one that DIRECTV CFO Pat Doyle mentioned prominently at last week's Bank of America/Merrill Lynch conference: Packages for folks with "moderate" incomes are sadly lacking in today's MVPD world. Between bundled networks and tiers stretching into the hundreds of (mostly unwatched) channels the price/value proposition is simply out of whack. And until, as Doyle suggested, platform providers can offer smaller – aka less expensive – packages, it will remain out of whack. And ripe for the picking by any OTT operator who can cut a less expensive deal.
as seen on skyreport
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So say what you mean, and mean what you say.
And if its ain't broke, don't fix it.
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