The latest on the ongoing evolution of the home entertainment paradigm. (Well, what else are we supposed to call it? Ain’t really just “TV” anymore, is it?)
by Nellie Andreeva and David Lieberman
It’s not easy being an indie standalone channel in the era of cord-cutting and “too much TV.” Participant Media learned that the hard way, moving in to pull the plug on its three-year old network Pivot TV, writing off a $200 million initial investment and further tens of millions in costs.
Their annual rate hikes have become risky as consumers, especially Millennials, warm to low cost alternatives including Netflix. Many cable owners fear that cord cutting and shaving will accelerate when they face planned live streaming services from Hulu and AT&T’s DirecTV — and possibly Apple.
These likely will have fewer channels than the traditional expanded basic pay TV bundle, and also cost less. Operators hope to compete by offering their own so-called skinny bundles, just featuring their most popular networks.
At the hight of cable and satellite services’ popularity, small, limited-appeal nets were considered safe when part of a network group featuring channels the cable and satellite providers had to have, which was used as leverage to secure carriage for the lower-profile nets. With the introduction of skinny bundles, that no longer is the case.
The danger is even bigger for small, independent channels as cable operators see their profit margins from TV slipping and want to cut costs. That has led to consolidation — for instance BBC America was acquired by AMC Networks which itself has been an acquisition target.
Some say Pivot TV was doomed from the start as Participant Media went into the indie cable network business without knowing how the market works….