Who is DirecTV Stealing from?
As more streaming services pop up and cable companies begin to offer more packages that allow for the individual purchase of channels, satellite providers like DirecTV may be at risk of losing some of those channels and users. The details of the channels may not be in the public domain but here are some of the probable ones that might be axed by DirecTV and the reasons why:
Regional Sports Networks
RSNs, which broadcast local MLB, NBA, and NHL games, are some of the most costly to deliver for providers such as DirecTV. Due to increasing costs that are required to obtain rights to these live sporting events, rivalry between providers and RSNs is quite common. Perhaps, DirecTV has recently lost the rights to distribute some of them, major RSNs in some of the largest markets. this can cause a negative attitude towards the network from people who love to see their local teams play if they cannot do so comfortably.
Niche Lifestyle Channels
Additionally, many of the lifestyle programs that include cooking programs, arts and crafts, travel, and other similar programs are expensive for DirecTV to offer to the few percentage of its users who would be interested in watching such channels. It’s conceivable that as margins get pinched, DirecTV might have deemed that it was time to drop some of these marginal channels to concentrate on programming that, by all indications, the bulk of its customers crave. Nevertheless, for the specific and rather limited target markets, this deprives the product of the measure of the special value that comes with the above-said channels.
Premium Movie Channels
Networks such as HBO, Showtime, and Starz among others are usually expensive to air since they offer premium movies. However, with the current trend in consolidation of media companies, some of these competitors might be offering these movie channels at even lower negotiated prices than what DirecTV is offering. Sustaining these costs keeps content providers’ revenues high and hence faces market saturation, declining consumer budgets, and probably higher costs of production to consumers themselves, it could be a financial necessity that forced DirecTV to drop some of the premium movie channels much as this hurt the consumers.
Regional News Channels
Of course, national news is always a valuable segment for any television provider, but the fact could be that the costs to distribute highly localized, 24/7 regional news channels could be sometimes unprofitable in terms of potential audience compared to larger metropolitan areas. Perhaps, some retransmission negotiations soured over the fees for the programs with regional news channels, which could not be justified by increased bills to the customers. This is because canceling a few hyperlocal news channels may only affect some cord-cutters but might annoy some diehard fans. Thus, although the details remain blurred it is quite probable that costs of content licensing, further subdivision and dispersion of the niches that potentially fit into DirecTV’s target audience, competition from the growing number of streaming services, as well as budget-consciousness of the consumers put pressure on DirecTV throughout their channel offer. The idea of negotiating the carriage fees and determining whether it is worth the cost to provide the subscribers with the many channels of interest is always a challenge. And sometimes that implies the discontinuation of some of these channels – even when this decision can be regrettable for the few people who still use these particular channels.
The effects on customers then depend on whether there exists other alternatives for accessing the content from the lost channel. While we observe more and more streaming providers appearing, this is becoming easier, but still, it is not as convenient as turning to the TV and having access through the set-top box immediately. Unless the competing TV providers grabbed the churned customers, DirecTV may have considered that losing a couple of channels is financially feasible and that the volume of dissatisfied subscribers canceling their accounts is less hazardous than not shedding some channels and lowering the income.
It has become increasingly unsustainable to retain every specifically targeted channel, together with satellite/cable expenses sufficiently affordable for the mass customer base in the fragmented media environment of the present day. And while nobody likes losing the ability to watch content they enjoy, for long-time pay-tv players like DirecTV, slashing niche channels that are expensive to license and don’t draw viewers much every day is one of the levers they can turn to help buttress their bread-and-butter mainstream revenue stream short-term. However, this increases the likelihood of the defection of viewers to other networks if the lost channel offerings are not replaced with other avenues of viewing similar or the same content.
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