Cablevision Systems See Dead Future For Big Bundle Of Cable Channels

Cablevision Systems CEO sees fewer customers taking the “big bundle” of cable channels and a shift to a mix of online and over-the-air broadcast programming.

James Nolan, CEO of Cablevision Systems (NYSE:CVC), anticipates a bleak future for the big bundle of cable service channels, expecting customers to switch over to a mix of online and over the air broadcast programs. In an investor group meeting organized by the Guggenheim Partners, he said that a reduction in the number of customers in taking big bundle is inevitable.

Such an impact is likely to affect programmers, which Mr. Dolan estimates from his own personal estimate is around 20-25 percent loss in the following five years, especially with the industry moving away from the current structure to new dimensions, such as digital antennae. His views hold many teeth in it. A Wall Street analysis of the Nielsen data show that the top 40 TV channels in the US, such as CNN and ESPN, lost more than 3 million subscribers for the past four years, because of ‘cord cutting’.

Demographics are also playing its part, with the customer base of the baby boomers shrinking while the current generation is hooked up into the Internet and streaming for movies and videos online. This is the reason why Mr. Dolan warned that the cable operators would stop selling video services one day and focus more on broadband service.

In response, Cablevision Systems has been introducing “cord-cutter packages”, which uses a digital antenna in order to pick up to 70 broadcast channels, including popular channels, such as CBS, ABC, and Fox.

Cord cutter and digital antenna programs are not yet deemed practical for the time being, due to a lack of content. However, due to HBO and ShowTime, it is now possible to mix the broadcast with over the top cable offerings. The price tag for the digital antenna is around less than $40, in addition to data and phone service, what Dolan calls it as a cheap triple play.

While there are a handful of competitors out there in the market, the CEO of cablevision is confident that their offer is one of the cheapest, because of lower prices, while acknowledging that their service is not yet a top class. Now the focus shifts to the customers having the chance to move from one bad cable company to a good one.

The organization is known for its affordable offerings to people who think that cable is too costly, as stated by the CEO.

Cablevision Systems stock price ended the day at $24.51, a gain of 0.60% from the previous day.