Opinion: Television Service Providers Be(A)ware

Over the past couple of weeks, television viewers in New York, New Jersey, Connecticut and Pennsylvania have been caught in the middle of an intense battle between Cablevision and the Scripps cable networks of HGTV and Food Network. The details of who did what to whom and who’s in the right and who’s in the wrong have been the center of much attention in our own media and marketing communities, and we’ll leave that to the pundits. 

Recently, Horizon’s David Campanelli discussed how this could fuel the longstanding a-la-cart discussion in efforts to help consumer’s keep costs down, and he’s right. We dove a little deeper into what consumers are thinking—how they’re prepared to act and the longer-term ramification.

Consumer sentiment was the intent of a recent online consumer survey conducted by Horizon Media’s strategic insights group curious@horizon. To cut to the chase, we found that from a consumer’s perspective, these situations are more negative for the providers than for the networks.

On Jan. 7, curious@horizon conducted an online survey among 300-plus Cablevision customers who can no longer receive their HGTV & Food Network programming.  Respondents were recruited via e-mail from a Census-balanced national survey panel.   Responses were gender-weighted to be roughly 50/50. In other words, we took a balanced approach.

The survey clearly finds that nearly twice as many people (48 percent) said the situation made them feel worse or much worse about Cablevision versus Food Network (28 percent) and HGTV (24 percent) despite the fact that the majority of people were generally aware of both Scripp’s and Cablevision’s roles in the situation. Fifty percent of respondents laid blame to both Scripps and Cablevision, and 53 percent attributed the situation to the two companies not agreeing on fees.

This may well be attributed to the fact that cable companies start from a low base in terms of consumer perception. A Harris Poll on public attitudes toward different industries shows that cable companies already score low on reputation. “This recent stand off between Cablevision and Scripps Network does not help the image perception challenge Cablevision already faces,” noted Aaron Cohen, executive vp and chief media negotiator for Horizon Media.

While a large majority (85 percent) of those polled would not pay more to continue watching Food Network and HGTV, many current viewers (52 percent) would consider changing providers. Importantly, we found that roughly half of the two networks’ viewers would watch the networks programming online, if possible. This is the elephant in the room. IPTV is fast becoming a viable alternative. Connect today’s high-definition TV’s with the sufficient bandwidth to an internet “video content collator” with a user-friendly interface and current Television Service Providers and the current industry business model has a real worry.

Clearly, this battle only raises consumer’s awareness of other content distribution alternatives. In other words, these public battles drive more consumers away from the business model both parties are currently leveraging. They are giving consumers a reason to seek viable alternatives, which bodes well today for satellite and feeds the not so far off elephant. Connect IPTV to their big HD TV’s and the zillion TVs of the world are the longer term beneficiaries of public TSP/content provider battles. They are pushing a change in consumer habits. While changing this habit may take a half a generation, the technology is there, the content is there and more consumers of all generations are getting more comfortable with looking beyond Television Service Providers for the content they seek.  

Based on what we see here, it’s very clear that it’s in Cablevision’s and indeed all Television Service Providers best interest to manage these instances quietly, quickly and without impacting the consumer. The longer this draws out, the worse consumer sentiment will be for them in the long run.