Cord Cutting and Skinny Bundles: More hype than hope?

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January 13, 2017 by Paul Dughi

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Cord cutting is real and it’s gaining traction, but not as quickly as predicted.  Nielsen’s latest report shows homes that subscribe to pay-TV (cable or satellite) is down 1.7% from last January.  That’s hardly a tidal wave of cord cutters.

At the same time, the number of TV households actually grew by 1.7%.  Yes, overall TV viewing is increasing.

2016 was supposed to be the year when people cut cable en masse.  All sorts of companies launched apps and so-called “skinny bundles” to attract people trying to trim their cable bill.  So what happened?  The skinny bundles weren’t all-inclusive and they weren’t all that skinny price-wise.

The big splash entrant into the skinny bundle market was DirecTV which launched DirecTV Now at $35 a month for 100 channels.  That seemed to me to be the best bet for people who still wanted most of what they get from a cable lineup without the big bill.

Those days are over

Effective January 9th, DirecTV says the “Go Big” package will now cost $60.  Add the necessary data streaming you’ll need and you’re now pushing a hundred bucks.  Sounds a lot like the cable bundle, doesn’t it?

In launching the product, DirecTV’s press room put out this missive:  Because of efficiencies, the cost of delivery was going to be minimal and, as CEO Randall Stephenson said, “I’m always willing to take thinner margins when there is low capital intensity in the product.”

 “(DirecTV Now) is exclusively an over the-top product. This is no set-top box, this is no truck roll, this is a customer pulling down an app getting a very robust platform. This is a very unique cost structure and a very unique platform,” that’s been built from the ground up minimizes costs to AT&T. – AT&T CEO Randall Stephenson

That didn’t last long.

Note:  people that did sign up at $35 will get to keep the price… for now.

 

 

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