By Steven J. Vaughan-Nichols
April 10, 2017
These internet-based TV systems face a hostile market since they must compete with ISPs.
The good news for cord-cutters is that last week YouTube TV softly launched in New York, Los Angeles, San Francisco, and Chicago. So, another success story for cord-cutters, as pricey cable companies are given more competition, right? Right? Think again.
Sure, YouTube TV, Sling TV, Sony PlayStation Vue, and FubuTV are all gaining viewers. In 2016, SNL Kagen reported that US cable subscribers dropped by 1.7 million. MoffenNathanson analyst Craig Moffett proclaimed the loss of subscriptions as “the fastest rate of decline on record.”
Kagan analyst Tony Lenoir added the subscription data for the end of 2016 “should settle the debate” about whether pay TV providers should be concerned about cord-cutters. In 2017, one in eight cable customers are getting broadband internet but no television.
The cable companies aren’t happy. Yes, selling broadband and “skinny” internet TV bundles such as AT&T’s DirecTV Now is profitable, but it’s not as profitable as the traditional cable TV business.
What’s a cable company to do? Look to Trump’s net neutrality hostile Federal Communications Commission (FCC) for help. One of Republican FCC chairman Ajit Pai’s first moves was to give AT&T an unfair advantage in the streaming TV market with DirecTV Now by allowing AT&T Mobile customers free streaming.