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Programmer/Distributor Cable TV Bundle Deals In the Era of Digital Content Delivery Alternatives
The digital revolution has invaded all things media: Music stores gave way to digital downloads and now audio streaming; video rental shops have all but disappeared; and subscription video-on-demand streaming services have exploded. However, as technological advancements force most of the entertainment industry to evolve or become extinct, the traditional cable TV bundle continues virtually intact. Yet, according to a 2014 Nielsen report, while the average U.S. television-watching home receives 189 channels, TV watchers consistently tune in to just 17. And a steady stream of customers has cut the cable cord altogether in favor of accessing content from alternative sources.
To avoid being left on the cutting room floor, certain cable industry leaders are pursuing strategic initiatives to appeal to the cord-free generation. These changes stand to significantly alter the longstanding relationship between programmers and distributors. But the existing contracts between programmers and distributors may limit the type of changes that either party may make, and when. While it's “prime time” for change among consumers, the black letter law of contracts may keep the bundle strings tied tight.
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