Wednesday, June 01, 2011
Young and poor challenge traditional pay TV model
separate entities--pose the biggest risks to the pay TV service model
as it exists today, a pair of reports claim.
Members of Generation Y--the young--have been well chronicled as cord
cutters whose attention spans are being drawn by any number of new
Internet-ready devices. According to a study by marketing consultants
Ideas and Solutions!, traditional pay TV providers need to develop
some nontraditional products, packages and messages to draw in and
then retain members of this upcoming generation.
That may be the easiest job facing the pay TV industry. Sanford
Bernstein analyst Craig Moffett has issued his own report that points
to the pay TV industry's "poverty problem" among Americans who, even
if the recession is over as many believe, can no longer afford pay TV
costs that have continued to rise as programmers and broadcasters
alike have demanded more bucks for their content.
"At the low end, customers aren't just choosing between one provider
and another. They're often choosing between these services and a third
meal," Moffett said. The most convenient choice for those who want
entertainment, he said, might be to take the third meal and back off
on the pay TV service in favor of Netflix (Nasdaq: NFLX), Hulu,
YouTube and other over-the-top providers and "make do with a back
catalog or off-the-run TV shows and movies."
