The Domino Effect
For years the most popular cable networks have resisted please from consumers to offer their content outside of traditional pay-TV packages. Their relationships with those cable companies were just too valuable to risk jeopardizing with such a move. And it’s easy to see why. In the cable providers, content makers always had a partner that they could effectively get whatever price they wanted from. Over the years there have been many high stakes standoffs between cable companies and networks, occasionally resulting in channels being blacked out for millions of customers until a deal can be reached. One always is, because the cable companies need to provide the channels that their subscribers want to watch, and every day that they don’t, they risk losing one to a competitor. So they pay up, and even when negotiations sour, the networks have been able to count on the fact that they inevitably would. However, as the cable companies continue to hemorrhage video subscribers, a new math is taking hold in the offices of the networks, who are now taking a serious look at OTT.
There was once a gentleman’s agreement to protect the mutually beneficial status quo. But any major network that breaks the ranks effectively breaks the dam and opens the door for others to do so as well. That’s what we’ve seen already, and in the course of about a week, it touched off a domino effect. First the NBA’s new deal with ESPN came to light, providing for the popular network to offer live streaming of NBA games to non-cable subscribers. Such a provision would never exist if there weren’t plans to do just that, and ESPN has hinted that other sports could join basketball in an over-the-top offering. As one of the most popular, and thus most expensive components of most cable packages, the notion of ESPN going direct to consumers wasn’t just a crack in the wall, it was a huge chunk taken out of it. But so far no specifics have really come out about a hypothetical ESPN subscription offering.
Then came the week that would make history. Along with sports on ESPN, HBO is another one of the cable-exclusive channels that have kept many people who would otherwise cut the cord from doing so. In an announcement that rocked the industry, coinciding with some bad news from Netflix, HBO revealed plans to offer their HBO Go streaming service to non-cable subscribers. Instantly the flood gates were open. Less than 24 hours later, CBS announced plans to stream live and on-demand content of their own. Popular Spanish-language channel Univision followed shortly after with similar plans of their own. In a short period of time, three major networks were prepared risk running afoul of the cable companies and offer their content direct to consumers. More are sure to follow.
Already Starz is considering joining the mix, with their CEO praising OTT distribution. Now that some big names have taken the lead, the rest aren’t likely to risk being left out. The cord cutting trend is undeniable, and with the cable companies losing subscribers, the networks are too. Acquiring subscribers outside of the cable paywall give the networks major room to grow, pitching their content to cord-cutters and cord-nevers. Though it also risks creating the conditions for a mass exodus from cable when the day arrives that you don’t have to have it to catch up on your favorite sports teams or HBO hits.
Some in the cable industry have painted a grim picture of these over-the-top services, warning of high prices. But the reason that people have been clamoring for these OTT options is that most cable packages is that they’re already paying high prices, and getting a lot of content that they don’t want. If a single person without kids is stuck paying over $80 a month for a cable package just to watch their favorite sports team, they’re also paying for the Disney channel and the Cartoon Network which they may never watch. Compared to that business model, even paying a higher fee per individual channel is advantageous because you’re only paying for what you want.
More networks going over the top is a boon for Rabbit TV Plus subscribers. For content that was once unavailable, we’ll now be able to direct users to these networks’ services where they can watch. It won’t be long before literally everything available on cable is available on Rabbit TV Plus, from individual shows, to entire networks that can be subscribed to on an à la carte basis. The networks and cable companies are still in the midst of deciding how they want to move forward, but even by taking the first steps, they’re making it possible for FreeCast Inc to deliver exactly what customers want.