DirecTV Finally Dumps OAN, Limiting The Conspiracy And Propaganda Channel's Reach

from the good-luck-out-there dept

Back in October, reports emerged indicating that AT&T had not only funded much of the creation of the popular conspiracy and fantasy channel OAN, AT&T executives had actually come up with the original idea. The channel, which routinely traffics in false election fraud, COVID, and other right-wing conspiracy theories, had seen most of its reach come courtesy of a partnership with DirecTV. As of last week, DirecTV executives informed OAN it wouldn't be having its contract renewed:

"The satellite-TV provider has notified OAN’s owner, Herring Networks Inc., that it plans to stop carrying the company’s two channels when their contract expires. Herring Networks also owns AWE, a lifestyle channel that stands for “A Wealth of Entertainment."

What changed? After its disastrous $200 billion Time Warner and DirecTV megamerger spree resulted in layoffs, lost customers, and general carnage, AT&T had to not only backtrack from its ambitions to be an online video and ad giant, it had to sell anything that wasn't nailed down to recoup the massive debt created from the deals. That included spinning off DirecTV into its own, new entity in a partnership with private equity firm TPG Capital. While AT&T still has a 70% stake in the venture, it now has other executives with a vested interest in calling the shots.

I'd wager that while Dallas-based right wing AT&T executives had no problem being associated with the conspiracy theory channel, AT&T's new partners at TPG likely weren't keen on the bad press. Especially in the wake of last October's reporting so closely linking AT&T to a channel that routinely traffics in dangerous gibberish like claims that COVID was created in a North Carolina lab.

As of last year, estimates pegged OAN's total subscriber count (people who have the channel in their cable lineup) at somewhere around 23 million, far lower than Fox News (78.6 million) or even Newsmax (58.2 million). But estimates of how many people actually watch the channel consistently is notably lower than that:

Without DirecTV's help, the channel's reach is curtailed even further. Now the channel is only carried by a small handful of cable TV providers, the biggest being Verizon's FiOS TV. Granted the channel's gibberish still gets traction online as part of the far right propaganda ecosystem (which includes both sharing by people who believe what the channel has to say, and outrage retweets from those who don't) but in terms of traditional distribution the move significantly restricts the propaganda bullhorn's impact all the same.

Filed Under: cable tv, carriage, conspiracy theories, oan, pay tv, propaganda
Companies: at&t, directv, herring networks, oan

Cable TV Cord Cutting Continues To Set Records, Though Streaming TV Is Slowing Down Too

from the price-hikes-ahoy dept

For more than a decade, cable TV executives brushed aside the threat of cable TV "cord cutting" as either a nonexistent threat or a temporary phenomenon. Of course neither wound up being true, and consumer defections from the bloated, pricey traditional cable TV bundle continue to set records during the COVID crisis. Traditional cable TV providers saw a 6.2% drop in subscribers in the third quarter of 2021, an all time record. It's particularly bad for traditional satellite TV providers, who saw a 12% dip in overall users during the same quarter.

But it's not just traditional cable that's feeling the pinch. Growth in new streaming alternatives is also slowing down:

Growth slowed for virtual multichannel video programming distributors (MVPDs) in the third quarter of 2021, as the category added just under 1 million subscribers compared to 1.7 million new subscribers a year ago...Including the modest gains for the vMVPDs, total pay TV distribution was down 5.2% in the third quarter, the biggest drop since the 5.5% decline in the second quarter of 2020..."

While streaming alternatives are still doing well, and still pulling subscribers away from traditional cable TV, the slowdown has many causes. One being that traditional streaming increasingly mirrors the habits of the broader TV sector, with broadcasters driving a consistent drum beat of consumer price hikes without expanding service offerings or increasing value to the end user:

"Six years ago, everyone burst out of the gate with eye-popping low prices,” MoffettNathanson said in a report Tuesday (January 5). “That helped them get out of the gate, but it undermined their longer-term prospects in two ways."

The first issue was that the vMVPDs attracted price-sensitive consumers. The second issue is that the vMVPDs would have to their raise prices faster than traditional distributors as content companies increased their license fees.

The other driving factor is that younger generations just don't watch as much television overall, with time traditionally spent binge watching TV series instead going toward binge watching YouTube and TikTok. That's not to say that more traditional isn't popular. Newer streaming TV providers now have 14.2 million subscribers, and traditional TV is expected to still lay claim to 72.7 million subscribers by 2023, albeit down from 100.5 million subscribers one decade earlier.

Filed Under: cable tv, cord cutting, streaming, tv

Yet Another Study Shows Mainstream Media Is A Key Vector In Spreading Misinformation

from the again-and-again-and-again dept

The common "accepted knowledge" these days among many is that the rise of disinformation and conspiracy theories must be driven by social media, and Facebook in particular (with Twitter and YouTube right behind). This theory has always seemed a bit bonkers, and we've pointed to multiple detailed, data-driven studies that showed that cable news was a much bigger driver of misinformation than social media. Specifically, it found that conspiracy theories and misinformation and the like didn't actually "go viral" until after it appeared on cable news.

So, it's good (but not at all surprising) to find yet another study pointing out the same thing. This one, first highlighted by MediaPost, involved a big survey exploring the spread of conspiracy theories -- and found that the mainstream media is often the biggest vector, rather than social media.

Contrary to popular opinion, we found that while technology (and social media specifically) has a role to play in perpetuating CTs, our data suggests that this is not the only source of information about CTs, and often not the main one either. People are more likely to say they heard about some CTs from a ‘mainstream’ news source (such as TV or a broadsheet or tabloid newspaper) than they are from a social media channel. We therefore need to be careful about locating technology as the source of the problem and indeed as the sole focus for possible solutions

In fact, the study notes:

“Our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in, and the legitimacy of, the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary role.”

Again, none of this says that conspiracy theories aren't spread on social media, because of course they are. But increasing evidence suggests they don't really catch on until the mainstream media gets involved, with TV News being a key vector and newspapers -- both "broadsheets" and "tabloids" -- playing a role as well. And yet, almost no one wants to explore the differing role among these other sources, and many people are solely focused on social media -- perhaps because it's new, and it's always easy to blame the "new" thing.

But it won't get to the root of the problem, and actually can serve to mask the real problems.

Filed Under: cable tv, internet, misinformation, newspapers, social media, tv news

MLB In Talks To Offer Streaming For All Teams' Home Games In-Market Even Without A Cable Subscription

from the home-run dept

Streaming options for professional and major college sports has long been a fascination of mine. That is in part because I'm both a fairly big fan of major sports and a fan of streaming over the wire instead of having cable television. My family cut the cord a couple of years back and hasn't looked back since, almost entirely satisfied with our decision. The one area of concern here continues to be being able to stream our local sports teams, as most of the pro sports leagues still have stupid local blackout rules. MLB.TV, the league's fantastic streaming service, has these rules too. While using a DNS proxy is trivially easy, easier would be the league coming to terms with modernity and ending the blackout rules. Notably, MLB did this in 2015 when it came specifically to Fox Sports broadcasts for 15 teams, but as I noted at the time:

But don't think for a single moment that that's where it ends. Even if MLB can't get similar deals in place for the other half of teams in the league, which would fully free up the fantastic MLB.TV product for local streaming, any modicum of success that Fox has with this program will be immediately adopted by the other broadcasters. They really don't have a choice. Cord-cutting isn't going away and it's been professional and college sports that have long kept subscribers tethered.

It took longer than I expected, but it's finally happening. Reports indicate that MLB is currently planning to rollout an all-league streaming option that would end local blackout rules entirely, even for cord-cutters. And, in case you thought this was going to be an MLB-only thing, its bringing the other major leagues along for the ride.

The web-based service — which could address a decades-old annoyance for baseball fans that some have partly blamed for the league’s steadily declining viewership — could launch as early as the 2023 season, a person with direct knowledge of the negotiations said.

The National Basketball Association and the National Hockey League are also considering partnering with MLB on the new streaming service, sources said. Insiders say subscription rates would vary by geographic market and could be between $10 and $20 a month — well below the monthly cost of most cable-TV packages, which can easily stretch past $100.

As you might imagine, the cable companies are not thrilled with this. After all, while cord-cutting has been a steady force in the American media landscape, the dam has yet to burst and that is almost certainly due to the appetite for live sports broadcasts that still sit behind complicated cable television deals these leagues have with broadcast partners. So how is this going to work?

Well, MLB is doing what I suggested almost a decade ago: making the streaming broadcast identical to the television broadcast and giving broadcast partners some of the revenue, while also giving the broadcast commercial advertisements the additional reach of the stream.

Sources said MLB Commissioner Rob Manfred could end up offering cable-TV giants a piece of the streaming revenue to compensate for potential subscriber losses. Manfred’s pitch is that cable TV won’t lose many subscribers, as MLB is mainly targeting younger customers who have already cut the cord, sources said. The cable companies don’t have streaming rights but could retaliate by paying less to broadcast games if they don’t like the bargain, sources said.

As for the teams, MLB’s streaming service would pay them based on viewership in their local markets. One MLB owner said the league has kept its owners appraised, and believes it has general support though no vote has been taken. Indeed, the MLB and team owners are concerned over dire forecasts for viewership. Roughly half of Americans will not be watching cable or satellite TV within a few years, according to Pew Research Center annual surveys.

There is no firm deal yet, as MLB is currently working with broadcast partners and its teams to finalize the plan. Sinclair Broadcasting is a major piece of gum in the works, because of course it is. Sinclair has the broadcast rights for nearly half the league's teams and is putting up a stink, though MLB's strategy appears to be repeatedly pointing out that Sinclair may be in such dire financial trouble such that it can't be trusted to continue operating far into the future.

At first, sources said Sinclair tried to persuade MLB to allow it to control the service for several years before handing the reins to MLB. But the league wasn’t having it, citing Sinclair’s financial condition and raising concerns that the company won’t be able to spend the money that’s needed for high-quality broadcasts, sources said.

In 2019, Sinclair’s Diamond Sports subsidiary paid $9.6 billion for the Fox Regional Sports Networks, since rebranded to Bally’s, giving it exclusive rights to the 14 MLB teams, 16 NBA teams, and 12 NHL teams. It borrowed a staggering $8 billion to fund the deal, sources said. Since then, Dish, Hulu and YouTube TV have stopped carrying the Bally’s RSNs, even as revenue from existing distribution deals has been slammed by cord cutting and subscriber declines. An August Moody’s Investors Service report found that Sinclair “now has an unsustainable capital structure given its very high leverage and weak liquidity.”

Don't threaten me with a good time, Sinclair.

Regardless, everything about these plans represents a massive step in the right direction. Sports leagues will be eyeing how this goes with great interest. When it goes well, as it almost certainly will, this could be the start of a massive change in how sporting events are consumed by the public.

And the end of cable television as we know it.

Filed Under: baseball, blackouts, cable tv, cord cutting, sports, streaming
Companies: mlb

Another 1.2 Million Consumers Ditched Traditional Cable TV Last Quarter

from the evolutionary-inevitability dept

Surprising nobody, the traditional cable TV industry lost another 1.2 million paying subscribers last quarter as users flee to other alternatives. Largely those alternatives consist of streaming video services that are cheaper, more flexible, and feature better customer service. Many others are rediscovering free over the air broadcasts. Others have simply shifted away from TV entirely, choosing to embrace YouTube or TikTok.

According to Leichtman Research, the top cable companies lost 587,649 customers in just the last quarter, compared to 698,000 for telco and satellite providers. Over the last year, traditional pay TV providers saw a net loss of about 4,520,000 subscribers, compared to a loss of about 5,460,000 over the year prior (impressive for a trend that the industry spent years pretending wasn't actually happening). Fortunately for the industry, the cord cutting revolution appears to be slowing somewhat:

"Pay-TV net losses of 1,230,000 in 2Q 2021 were about 275,000 fewer than in 2Q 2020 on a pro forma basis,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Over the past year, top pay-TV providers had a net loss of about 4,520,000 subscribers, compared to a loss of about 5,460,000 over the prior year."

While the rate of decline is slowing there's still a lot of room to fall. The top traditional pay TV providers still serve roughly 77.6 million subscribers in the US, many of which stick around thanks to sports programming. As sports increasingly shifts away from traditional cable providers and toward streaming alternatives you can expect subscriber counts to follow suit.

Users continue to flee traditional cable for the usual reasons: high prices, terrible customer service, and bloated and inflexible cable channel bundles. There continues to be some headway in these arena by entrenched cable TV providers, but there's a contingent of execs that simply refuse to seriously compete on price. In large part because many of these companies (Comcast) enjoy regional monopolies over broadband access, allowing them to squeeze those subscribers tighter than ever with bizarre fees and broadband usage caps and surcharges.

Meanwhile increased competition in the streaming TV space has also made things a bit rougher on sector leader Netflix as well, which has been bleeding subscribers in both the US and Canada thanks to growing new entrants like Disney Plus. All in all the shift away from dominant cable TV providers toward more flexible, cheaper alternatives and actual competition (instead of the "wink wink, nod nod" non-price competition we saw between satellite TV and traditional cable TV for years) continues to be a great thing.

Filed Under: cable, cable tv, cord cutting, internet, pay tv, streaming

Georgia Towns Sue Netflix In Flimsy Bid To Nab A Slice Of The Pie

from the good-luck-with-that dept

A handful of municipalities in Georgia have filed a lawsuit (pdf) against Hulu, Netflix, and other streaming providers in a ham-fisted bid to saddle customers with cable franchise fees. Such franchise fees were common in the cable TV era. In large part because such cable providers had a physical presence in local municipalities. They utilized public rights of way, hung their coaxial cable on city-owned utility poles, often had local offices or broadcast hubs, and in some instances provided public access television.

As a result, traditional cable companies struck local franchise agreements requiring they pay the local community for the right to access public property and resources. Since streaming providers (usually) have no physical presence in the states they're doing business, those fees didn't transfer over to the streaming industry. Enter these Georgia towns, which filed a lawsuit not only claiming that traditional cable companies haven't been paying the money they owe, but that streaming providers like Hulu and Netflix should also be paying up:

"Gwinnett County, Brookhaven and Athens-Clarke County are seeking an injunction to keep these video service providers from operating in their municipalities until they acquire the necessary franchises, agree to pay franchise fees in the future and compensate the plaintiffs for the unpaid fees for past service dating back to July 1, 2007 as well as legal fees.

The total amount owed to these municipalities if they win the case could be much more than $5 million."

The towns are leaning heavily on a Georgia law named the Consumer Choice for Television Act. The Act was updated in 2007 to require that "video services" pay the town or city a quarterly franchise fee to municipalities in areas where they use the local internet service provider’s broadband facilities to deliver content. The problem, of course, is aside from local content delivery network hubs (CDNs), the municipalities in question aren't really doing anything that warrants getting a slice of this revenue. That's not stopping them, apparently:

"While competitors such as Charter Communications, Comcast and Cox have paid franchise fees in compliance with this law, DirecTV, DISH, Netflix, Hulu and Disney have neglected to apply for a franchise or pay franchise fees since this law went into effect on July 1, 2007, the court filing claims."

This isn't the first effort of this type. Towns in Nevada, Texas, Indiana, and Ohio have been trying something similar. Companies like Netflix, as you might expect, aren't particularly impressed:

"These cases falsely seek to treat streaming services as if they were cable and internet access providers, which they aren’t,” a Netflix spokesperson told The Verge. "They also threaten to place a tax on consumers that the legislature never intended, and we are confident that the courts will conclude that these cases are meritless."

While there's always the chance the case could be heard by idiot judges, I think Netflix is probably right. That said, most of these municipalities have every right to be annoyed, and this is more complicated than just "mean old municipalities are being greedy."

Cities have long been solidly screwed by the telecom and cable industry, which in the early aughts effectively gutted most local (town, city level) franchise agreements. Basically, phone companies like AT&T and Verizon, looking to get into the TV business, whined incessantly about how unfair it was to have to do things like expand broadband and TV service evenly, provide a few public access TV channels, and give local municipalities fair compensation for using city utility poles and public rights of way.

So, over-emphasizing the real occasions where city leaders made unreasonable demands, they lobbied to shift most franchise control to the state level, claiming this would result in greater efficiency, more competition and lower prices. The problem: because state legislatures are more efficiently corruptible by AT&T, Verizon, and Comcast lobbyists, most of these new state agreements by and large screwed cities over, gutted most consumer protections, obliterated local franchise revenue, neutered most of the benefits more local agreements provided (like even broadband deployment), and resulted in state-level agreements that were little more than telecom legislative wish lists.

In the end, cities lost authority and income while facing no shortage of new, costly challenges (like climate change, infrastructure erosion, and COVID). But while it's understandable that municipalities are pissed in the wake of getting railroaded by the telecom sector and losing revenue, trying to claw back this income from streaming providers that have little to no actual presence in these areas doesn't make a whole lot of sense.

Filed Under: cable tv, franchise fees, georgia, streaming
Companies: hulu, netflix

Wall Street: Traditional Cable TV Sector 'Unraveling' In Wake Of Covid

from the adapt-or-perish dept

While COVID-19 has been great for some sectors (like video games or webcams), it's beating traditional entertainment options (like brick and mortar movie theaters and cable TV subscriptions) to a pulp. To the point where Wall Street analyst Craig Moffett has declared that the traditional cable TV sector is unraveling thanks to a sharp spike in cord cutting. Recent data suggests that traditional pay TV subscriptions have dropped 22.8% from its peak back in 2014. And by the end of 2024, analysts expect that fewer than half of US homes will subscribe to a traditional pay TV service.

A need to cut household costs, fewer live sports, obnoxious price gouging, and lousy customer service have all fused into a much worse problem, proclaims Moffett:

"According to Moffett’s estimates, pay TV subscribers fell 7.7% in Q2 (8.3% if pandemic-related nonpay customers are excluded), the worst ever for the sector. And it comes after eight consecutive quarters of worst-ever losses. That forebodes a scary trend for the business.

“At this rate of decline (somewhere between 7.7% and 8.3% per year), the traditional pay TV business would disappear entirely in another 12 years,” Moffett wrote, adding that just two years ago, the rate of decline was 3.3% while last year fell at a 5.4% clip.

“The pay TV ecosystem is well and truly unraveling,” Moffett wrote.

Fairly amazing for a trend the industry (including Moffett) spent years either downplaying or denying entirely. Cable executives had recently been trying to claim the trend would soon be reversing itself, a bit of prognostication that's not looking so hot.

To be clear, giants like AT&T and Comcast will be fine. They enjoy major broadcast empires and vast monopolies over broadband, allowing them to counter these losses by jacking up the cost of broadband service with little to no market or regulatory repercussion. But if they want to continue making any meaningful money off of television, they're going to have to finally do things like seriously compete on price (gasp) and actually investing in customer service (streaming alternatives routinely score far higher on customer satisfaction due to better service, lower prices, and greater flexibility).

Actually trying on this front means not socking consumers with cable TV bills that are packed with so many bogus fees, your total due can be up to 45% higher than the company's advertised rate. Actually trying means genuinely investing in customer service instead of routinely offshoring support to substandard subcontracted services. These are changes the industry could have embraced years ago, but it's abundantly clear many executives believed that the traditional cable TV cash cow was going to live forever. Now, due to decades of denial, the mad scramble from behind the eight ball begins.

Filed Under: cable tv, cord cutting, covid

Charter Spectrum's Bullshit 'Broadcast TV' Fee Soars To $16.45 Per Month

from the nonsensical-surcharges-may-apply dept

Like countless other American business sectors, U.S. cable and broadband providers have been using hidden fees to covertly jack up their advertised rates for much of the last decade. These fees, which utilize a rotating crop of bullshit names, help these companies falsely advertise one rate, then sock the consumer with a significantly higher rate post sale (often when locked into a long-term contract). They also let them falsely try and claim that prices haven't increased, when they pretty clearly have.

Back in 2014, Comcast introduced a new $1.50 per month surcharge on cable bills it called its "Broadcast TV Fee." Said fee was really just a portion of the cost of doing business for Comcast (programming costs), busted out of the full bill and hidden below the line -- again to help the company falsely advertise a lower price. Fast forward to 2020 and the fee is now $15 per month, per user, and growing -- despite a number of lawsuits (correctly) alleging that the fees are misleading and predatory.

And it's not just Comcast. Charter (Spectrum) has also heavily embraced such a fee, its own "broadcast TV surcharge" getting jacked from $13.50 to $16.45 a month starting in August:

Charter has raised the fee repeatedly—it stood at $9.95 in early 2019 before a series of price increases. At $16.45 a month, the fee will cost customers an additional $197.40 per year. Charter sells TV, broadband, and phone service under its Spectrum brand name and is the second largest cable company in the US after Comcast.

One other "handy" benefit to the fee (for Charter and Comcast) anyway, is that it lets the companies tap dance out of consumer "price lock" guarantees or promotional rates, by letting them pretend that arbitrary fee increases are not actual price hikes. Charter also imposes a slightly smaller Broadcast TV fee on its streaming TV plans, with that fee getting jacked from $6 to $8.95 a month. That's, of course, in addition to all the other arbitrary fees and surcharges tacked onto your monthly bill, including broadband usage caps and overage penalties.

It's the sort of running scam that would be prohibited by functioning, objective consumer protection regulators or lawmakers, were we to actually have such a thing.

Filed Under: bogus fees, broadcast tv fee, cable tv, fcc, ftc, price increase, truth in advertising
Companies: charter, comcast

YouTube Jacks Live TV Streaming Prices 30%, As Streaming Sector Starts To Resemble Good Old Cable

from the meet-the-new-boss... dept

There's absolutely no doubt that the streaming TV revolution has, by and large, been a positive thing. Thanks to a ridiculous surge in streaming TV competitors, consumers now have far more options than they've ever had before, resulting not only in lower prices and more flexibility in TV options, but customer service that far surpasses the clumsy trash fire that is Comcast customer service.

But all is not well in paradise. Those laboring under the illusion that this competition would magically rid the sector of its worst impulses will likely soon be broken of this notion, as YouTube this week announced it would be raising prices for its streaming TV service some thirty percent ($15 to $65 a month). Much like traditional cable TV vendors have done for years, YouTube blames the hikes on the high cost of programming, and innovative improvements to the platform:

"We don’t take these decisions lightly, and realize how hard this is for our members. That said, this new price reflects the rising cost of content and we also believe it reflects the complete value of YouTube TV, from our breadth of content to the features that are changing how we watch live TV. YouTube TV is the only streaming service that includes a DVR with unlimited storage space, plus 6 accounts per household each with its own unique recommendations, and 3 concurrent streams. It's all included in the base cost of YouTube TV, with no contract and no hidden fees."

This of course wasn't surprising. The same broadcasters that kept jacking up prices on traditional cable TV providers (one and the same when talking about AT&T/TimeWarner/HBO or Comcast/NBC/Universal), are now doing the same thing to streaming TV providers. In short, it's a never ending quest to extract higher and higher rates for the same programming at a moment when consumers have made it abundantly clear they're sick of paying an arm and a leg to watch ad-laden, traditional TV (not to mention the whole pandemic and resulting financial toll thing).

It's a greedy downward spiral that even Wall Street analysts have been warning for years isn't sustainable. Said greed recently resulted in record losses in the traditional cable TV sector, as users, angered by relentless price hikes, headed for the exits. Granted with the same price hikes now hitting streaming TV providers (especially those offering live broadcasts), these users (especially younger ones) are more likely than ever to avoid the concept of traditional TV entirely and just go watch free YouTube, TikTok, or (gasp) read a book.

The sector has already inadvertently been driving some users to piracy thanks to its obsession with exclusives. With users now forced to hunt and peck through a rotating crop of paywalled services to find their favorite content (Star Trek on CBS All Access, Star Wars on Disney+, Friends only on Comcast!, etc.) many users had already been reverting to piracy (or OTA broadcasts) for simplicity and cost's sake. Raising prices hand over fist isn't likely to help that, and there's the potential here to undermine all of the work put into convincing content owners to make content easier to access over the last two decades.

Other ugly habits of traditional television have also been slowly meandering over to the streaming TV space. The Roku, Amazon, and AT&T standoff, for example, has resulted in Roku and Amazon hardware users being unable to access AT&T's streaming platforms as they bicker over rates, ensuring that the annoying and ugly content blackouts and retransmission feuds make their way to streaming. A lot of these standoffs will inevitably get worse (especially given the feckless FCC authority and death of net neutrality).

Again, streaming TV right now is a huge step up from traditional cable, the old cable box, bloated cable channel bundles, and sky high prices. But there's still plenty of warning signs that as the sector grows, it's going to forget many of the important lessons of its past.

Filed Under: cable tv, piracy, pricing, streaming, youtube tv
Companies: google, youtube

Cable Customers Have Paid $3.5 Billion For Sports They Can't Watch

from the money-for-nothing dept

Despite the pandemic suspending most major league sports play, cable TV consumers continue to pay for programming they can't watch.

For fifteen years or more, consumers have complained about the high cost of sports programming. That's particularly true for consumers who don't watch sports, but are often forced to pay the sky high prices for sports programming as part of a bloated cable bundle anyway. One survey, a few years ago, found that 56% of consumers would ditch ESPN in a heartbeat if it meant saving the $8 per month subscribers pay for the channel. The "regional sports fees" tacked on to subscriber bills have also long been a point of contention because they're often used to help falsely advertise a lower rate.

NY Attorney General Letitia James recently fired a warning shot over the bow of the industry, calling on seven major cable TV providers to begin offering refunds for nonexistent programming:

"At a time when so many New Yorkers have lost their jobs and are struggling, it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing. These companies must step up and immediately propose plans to cut charges and provide much needed financial relief. This crisis has brought new economic anxiety for all New Yorkers, and I will continue to protect the wallets of working people at every turn."

This being the cable TV industry, the requested refunds haven't happened. AT&T (DirecTV) has let some users get refunds for premiums sports subscriptions (MLB Extra Innings and MLS Direct Kick), but none of the seven cable providers singled out by James appear to have changed their policies in the slightest or offered any refunds whatsoever. In a statement, AT&T makes it pretty clear that because broadcasters aren't likely to give it a break, consumers won't be getting a break either:

"We continue to monitor the situation closely and are in contact with programmers and sports leagues as they plan their next steps. Any rebates we receive from programmers and sports leagues will be provided to our customers."

That's generally been the same line trotted out by cable providers like Spectrum, which are quick to point out that there are layers of complicated contracts at play and more than a lot of uncertainty as to what happens next. And while that's certainly true, we're not talking about pocket change here. One recent analysis estimated that pay-tv subscribers have paid almost $3.5 Billion in cable fees over the last two months for live sports that never happened:

"...there are around 86.5 pay-TV households in the United States. On average, each of these households pays around $20 per month in fees for sports programming. That means pay-TV subscribing households in the US pay about $1.73 billion per month in fees for sports programming. And with two months of no live sports thus far, that means pay-TV companies like Comcast and AT&T have received nearly $3.5 billion in fees for sports programming that features no live sports."

Somebody has to eat those costs, and congratulations, it's going to be you, the end consumer. How long this goes on is uncertain, but with the FCC asleep on consumer issues, it's unlikely the federal regulator will help. Fortunately (unlike the broadband sector), the rise in streaming competition means users have options. Cord cutting was already setting records in 2019, and with Sports being the only thing keeping users subscribed to traditional cable, cord cutting is expected to soar to even greater heights thanks to COVID-19.

Filed Under: cable tv, covid-19, letitia james, pandemic, sports