For more on channels — Canadian this time — turn to Page 30. 28 “New [American TV] channels don’t always have to originate from the U.S. In 2005 we launched Crime & Investigation Network in Australia and later expanded it worldwide, including in the U.S. The success of a channel today depends in part on owning the content for both linear and nonlinear services, for the purposes of successful negotiation of distribution agreements and more importantly for the consumer experience. Having at least three or four successful channel bouquets provides leverage with service providers in terms of carriage and the package the channels are placed in. The cord-cutting, cord-ripping issues in the U.S. are a result of increased competition from non-linear services such as Netflix, Amazon, PIV, and Hulu to name a few. The U.S. market is particularly vulnerable due to the highly penetrated and relatively expensive (ARPU) pay-TV market. The same situation exists in the U.K., while in other parts of Western and Eastern Europe, pay-TV penetration is relatively low; therefore, there are more opportunities to grow, despite competition from online platforms. In Asia we find a similar situation with low pay-TV penetration, while in Latin America, there remains significant opportunity for increased pay-TV penetration, however only in select countries (maturity of pay-TV varies).” Chat with Steve Ronson, A+E Networks March/April 2013 Channels’ Riches (Continued From Page 26) (Continued From Page 26) provider for ethnic channels is Dish Network. Distributors handle ad sales (a 50-50 split on net with the channels) and leave avails for local TV spots. Revenues from subscribers are usually split 50-50 between the distributor and service providers.Inturnthedistributor splits its portion of revenues with the content provider (channel). Other models are for the distributor to pay the channel a fixed amount (let’s say $1 million per year) or a flat fee for sub (e.g., 25¢). The aforementioned issues facing cable/satellite TV (i.e., increased subscription costs and people leaving their systems in favorofonline)representathreat of astronomical proportions to the industry. Cable bills have more than doubled over the past decade. Subscribers currently pay $90 billion a year for their services. But researcher SNL Kagan noted that 85 percent of U.S. households paid for TV service in the third quarter of 2012, down from 87 percent penetration in the third quarter of 2009. SNL Kagan estimated that 4.3 million people relied on Internet video instead of paying for TV, projecting that number will more than double by 2016. In2004 thedebateabout ending the current practice of offering bundled package versus a la carte service went before the U.S. Congress. Today it is resurfacing even though service providers are lookingatwaystounbundlesports programs that are driving up subscription costs. Officially, the industry is fighting this provision. According to A+E Networks’ Ronson, “A la carte is not a model that will benefit consumers and content providers.” However, the cable/satellite service providers are not standing idle— they are starting to react. Singapore’s StarHub, for example, has introduced a “payas-you-watch” service for viewers who do not want to commit to a subscription. Plus, satellite is growing, especially in Europe, where it now reaches 84 million TVHH, surpassing the number of homes reached by cable and over-the-air TV. Similarly in Asia, satellite TV grew by 15.19 percent in 2012 compared to the previous year, reaching a total of more than 262 million subscribers. Channels’ Riches, Quality Hit Snags
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