Are low cost programming packages the answer?


The cable industry has been losing subscribers for various reasons. To fight back and retain a few particular customer segments, MSOs (Multi System Operators) have been experimenting with low-cost programming packages.  And they are now rolling out these packages beyond their local beta markets and trial offers, which I’m extremely excited about. It’s a great step in the right direction to make these budget-friendly packages part of MSOs standard offering, so that mainly more budget-conscious subscribers can be retained and hopefully new ones gained.

Low Cost Programming

These video-only packages, offered by MSOs such as Cox Communications and Time Warner provide subscribers access to various expanded basic cable networks such as Discovery Channel, E! and Nickelodeon. Cox Communication’s “TV Economy” package is $34.99/month and Time Warner’s “TV Essentials” is $40/month. Not bad.

From a financial stand-point, it will be interesting to see if these MSO’s churn and acquisition results improve as this attempt to turn around the industry will most likely only retain and acquire customers who are budget-conscious but still care about having the service. On the other hand, I’d imagine that these packages will have no effect on those subscribers who get all their content online.

At SWIRE, we’ve been battling all of these challenges with our cable partners. So, we’re excited to face the marketing challenges of this offering and maximize results.

However, the big question remains: Are subscribers cutting the cord because they don’t want to pay as much for cable? Or are they cutting the cord because they get their content for free online?


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  • http://www.facebook.com/profile.php?id=650296242 Bruce Schneider

    Sven,

    Very good and timely post. The answer is yes, and if they can get it down to $19.99-24.99, they’ll be even better positioned. I’ve never had pay tv for the very reason that it is so expensive and I’d nvere watch 100 channels, anyway.

    Have a great 2013!

    • http://twitter.com/ZKnipser Sven Simon

      Thanks for your comment, Bruce. So you’re one of their target customers then. Do these low cost packages entice you to potentially look into becoming a subscriber then? Or would they have to come down a little bit more, as you suggested?

      I’m extremely curious to see the effects over time…

    • http://www.facebook.com/davidparsonsiii David Parsons

      Agreed. One of the networks is planning on doing just that… disruptive technology. Stay tuned :)