Today DIRECTV came out in support of changing how people pay for and watch TV. With this DIRECTV now wants to offer smaller packages that are more flexible and cheaper. Yet there are some problems to making that a reality.
The main problem here is that content owners like Disney, Warner Bros. Discovery, and NBCUniversal are unwilling to let providers like DIRECTV make changes to their packages. “Unfortunately, while DTC offerings have evolved, pay TV packages have remained largely unchanged. Instead of allowing distributors like DIRECTV to also develop smaller, more tailored packages at prices that reflect the value they get from the content, programmers have continued to impose and enforce strict bundling requirements through exorbitant minimum penetration rates – the minimum proportion of a distributor’s subscribers required to access a channel. These antiquated requirements force pay TV customers to subscribe to many channels they may not watch, which have yielded ‘fat bundles.’ At the same time, programmers have reserved flexible genre-based offerings solely for themselves, eroding the price-value proposition for pay TV customers by shifting the best programming to DTC services while raising programming fees on pay TV.” DIRECTV said in a statement today.
With this DIRECTV says it and other cable TV providers are losing subscribers “because of our collective failure to evolve to meet consumer preferences, not due to external forces.” To help with that DIRECTV is proposing several changes.
Here is everything that DIRECTV is proposing happen:
- Flexible Packages. Consumers want the ability to choose from genre-based programming without piecing together and purchasing an extensive lineup of channels that don’t meet their desires.
- Lower-Priced Alternatives. Consumers want price points closer to the DTC options they are familiar with and the ability to pay for all their programming through one platform.
- Aggregated Experience. Consumers want access to their favorite shows and sports and the ability to discover new content in one complete experience – live ‘linear’ TV or on-demand content from DIRECTV or a third party – instead of through numerous disjointed entry points while managing multiple individual subscriptions to those products.
To achieve any of these goals DIRECTV needs content owners to agree to these changes and so far they have not been willing to make these changes.