- The economic argument is lopsided against the Pay-TV industry (CHTR, CVC, TWC, DISH, DTV) moving to an a la carte system, reasons Needham.
- The investment firm has some staggering estimates which indicate consumers could end up paying significantly more for an unbundled system or see a large number of networks close up shop to limit their choices.
- Working backwards, 180 channels at an average annual programming cost of $280M per year requires a bundled system to create the ad and subscriber revenue to support it.
- Though the math might work out fine and dandy, subscriber losses and a younger generation unfazed by cord-cutting indicates something might need to give.
- The wildcard in the mix: Online TV initiatives from Sony, Google, and Intel as well as the evolution of Netflix (NFLX) will also play a factor.
- Related stocks: CBS, DIS, AMCX, TWX, CMCSA, FOXA, SNI, MSG, DISCA
The Pay-TV industry: Something has to give
Dec 4 2013, 17:23 ET