TV networks try new tricks to woo pay TV partners as ratings slide
TV networks try new tricks to woo pay TV partners as
ratings slide
By Jessica Toonkel JULY 18, 2017 / 9:22 PM
(Reuters) - Sliding ratings and a continued drop in cable
subscribers has led programmers such as Viacom Inc, Univision Communications
Inc and AMC Networks Inc to invent new ways to justify their worth to pay TV
providers.
In the past, programmers could rely on their hit shows as
leverage at the bargaining table with cable and satellite partners who buy
their programs. But as online viewing continues to disrupt the traditional
media business, programmers are pitching everything from co-producing series with
distribution partners to offering data for use in advertising.
The way people watch TV is rapidly changing. Fewer people
are watching live television, leading to declines in ratings and ad revenue.
And at the same time, more people are cancelling cable subscriptions to watch
shows online on their tablets or phones, resulting in record customer losses.
Declining subscriptions have left cable companies
hard-pressed to pay higher prices for TV shows.
Cable and satellite companies shed 793,000 subscribers in
the first quarter, more than four times the loss during the same quarter last
year, according to research firm BTIG. Analysts at UBS estimate another 1
million customers will cut the cord in the second quarter as there are no signs
of this trend abating.
"The distribution business has changed more rapidly
in the past 12 months than in the prior five years," said Tom Gorke,
executive vice president of content distribution at Viacom. "If we just
focus on 'here are my channels and here is my price, call me with your
response,' that is not going to grow the pie."
While the economics of renewal negotiations is still
largely focused on programming, being able to offer other things can help, said
Eric Ratchman, executive vice president of content distribution at Univision.
Digital Focus
Viacom CEO Bob Bakish has made it a priority to improve
relations with distributors.
Over the past several months, Bakish, Gorke and his team
have met with the chief executives for all the largest distributors asking what
they can do to help them do their business better, Gorke said.
For Viacom, the company said it is in ongoing discussions
to help distributors on everything from identifying password sharing on paid TV
apps, to using its viewer data to help target advertising around their
broadband and other services.
Offering viewer data helped Viacom clinch a distribution
deal with Suddenlink parent Altice USA in May, marking the end of a two-year
dispute with the cable company.
Meanwhile, Univision is leveraging the popularity of
European soccer to entice a pay-TV partner. Univision owns the Spanish-language
rights for more than 600 Union of European Football Associations (UEFA) games
and is looking for a distributor to become the exclusive partner on some
televised games, said Ratchman.
Univision would also like to co-produce more dramas with
distributors like it did with Netflix's "El Chapo," Ratchman said.
AMC, home of the popular "The Walking Dead,"
zombie series inked a co-production deal with Charter Communications to create
programming exclusively for Charter's Spectrum subscribers to watch first
before AMC airs it elsewhere..
Last month, AMC launched a monthly subscription option
designed for customers of Comcast Corp's Xfinity TV packages. AMC is in talks
to do similar deals with other distributors, said Ed Carroll, chief operating
officer of AMC.
Such deals demonstrate how conversations between
distributors and programmers have evolved away from pricing of content to a
more comprehensive digital focus, said Matt Strauss, general manager, video and
entertainment services for Comcast Cable.
"The conversation has gotten more sophisticated with
respect to digital rights and customer experience," Strauss said. "I think you are seeing a
lot of networks leaning into this."
Viewing behaviour by age and device...
Reporting By Jessica Toonkel; editing by Anna Driver and
Diane Craft
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