Cord-Cutting Prompts TV Networks to Take Action

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Statistics show that 22.2 million U.S. consumers are expected to cancel their satellite or cable TV service by the end of 2017. Many cite the long-term commitment and high cost of such services as reasons for their decision to cut the cord. Regardless, the trend of cord-cutting has prompted some of the market’s biggest TV networks to consider new action.

As explained by The Street, TV networks are looking to evolve and stay afloat amidst the cord-cutting revolution by charging higher advertising fees as well as affiliate fees. Charging higher affiliate fees could backfire by raising the cost of programming for consumers, however. And charging higher advertising fees could discourage advertisers from buying their inventory.

Another tactic TV networks are using to increase revenue is raising the price of programming for existing subscribers. Of course, a higher subscription cost may also backfire by encouraging consumers to cancel their subscription to the respective network.

Perhaps the most effective strategy for TV networks adapting to the cord-cutting revolution is to offer a separate streaming service. CBS, for instance, offers a streaming service for $5.99 a month with ads or $9.99 a month without ads. CBS All Access is still relatively new, but it signals a new era for the future of TV networks.

Even premium networks like HBO and Showtime have launched streaming services. Once subscribed, consumers can watch programming from any Internet-connected computer or device. In the past, consumers were forced to buy a satellite or cable TV subscription to watch content from these providers. Now, however, they can stream it using a standalone app for HBO Now or Showtime Anytime.

Disney has also announced plans to launch a streaming service. Earlier this year, Disney said it would remove its films and shows from Netflix by the end of 2020. Additionally, Disney will launch a standalone streaming service for its own content in 2019. This new service will feature the company’s intellectual property, including Pixar, Marvel and Star Wars content.

So, what’s the future hold for TV networks? As consumers continue to ditch their cable and satellite services, TV networks must change the way in which they operate. This means offering content through standalone streaming apps and services that doesn’t require a long-term commitment.

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