Light Reading, sourcing the Wall Street Journal, finds that small and medium MSOs are cutting back on multi-channel television offerings in favor of providing simple Internet and phone services.The article cites two smaller companies (Ringgold Telephone Co. and BTC Broadband) that have dropped their TV bundles entirely, along with Cable ONE Inc., a medium-sized MSO, which has pared back its offerings because of escalating programming costs and growing consumer adoption of online video.
The reasons for this trend are purely economic. It’s estimated that cable programmers will rake in $35 billion in licensing fees in 2014. That means that cable operators have had to shell out big bucks for the privilege of distributing content from companies like Disney and Viacom, and are looking for ways to avoid those costs in the future. At a recent industry meeting, CEO Steve Weed of Wave Broadband went so far to suggest that small operators should embrace the opportunity to get rid of TV service. “I want to be a dumb pipe,” said Weed, “with a lot of good service.”