Netflix, which was one of the main reasons for customers abandoning their pay TV subscriptions, may have to implement price hikes do to exploding content fees. It has been difficult for Netflix to renew content distribution deals with many content providers like Starz, because the of the higher prices. Starz left Netflix earlier this year, which removed almost 1,000 popular movies and TV shows from Netflix’s line up. Netflix is also expected to lose about 80% of their A&E programming, since its current contract with A&E is set to expire this year—which may cause Netflix customers to bolt.
Because of rising content prices, it will be difficult for Netflix to maintain the same prices while delivering the same quality. This presents an opportunity for the major cable companies, who are developing “TV Everywhere” services to win back unhappy Netflix customers.
“TV Everywhere” service allows consumers to watch any TV show any time they want with any internet connected device. This was one of the major benefits of Netflix, which the cable companies are now integrating into their standard service plans.
According to Comcast CFO Michael Angelakis, about 5 million of their 22.1 million customers are using TV Everywhere. It is anticipated that more people will opt to use TV Everywhere, so Comcast is focusing on working with content providers to get the streaming rights to as many programs from as many networks as possible.
Just recently, Viacom has partnered with Time Warner Cable, Verizon Fios, and Suddenlink to let customers stream exclusive content from their stable of networks through the TV Everywhere platform. This means that the subscribers of Viacom’s pay TV partners can watch live shows on Nickelodeon, MTV, Comedy Central, VH1, and more with any internet connected device, in or out of the home.
FOX has just unveiled its latest TV Everywhere service, which allows authenticated pay TV subscribers to watch brand new Fox programming that aired less than 8 days ago on Hulu and Fox.com. Not wanting to get left behind by other competing networks, they have also partnered with CableOne, Verizon Fios, and Dish Network to provide TV Everywhere for fans of Fox shows.
FOX’s President of Distribution Michael Hopkins predicts that: “2013 will be a big year for TV Everywhere. If we are back year next year at this time, I could see the amount of content tripling or quadrupling.”
The National Inflation Association (NIA) predicts that over the next 6-12 months, every major pay TV operator will make it a priority to include TV Everywhere streaming rights to their content distribution renewal contracts with all major content providers. The consumer has spoken, and if pay TV wants to be relevant again, they need to give customers what they want.
Will Netflix be able to rebound and offer subscribers quality content for great prices? Will cable and satellite TV win back all the customers they lost to Netflix with their new TV Everywhere platforms? Only time will tell…but in the meantime, there’s a lot of great TV to go around—whether you’re inside or outside the home.