Cablevision CEO: No Immediate Cord-Cutting "Landslide"
"I don’t think the sky is falling quite yet," but over a decade 30 percent of the pay TV market could move to OTT services, says Jim Dolan, who also calls Verizon's impact on his company "minimal."
"I don’t think the sky is falling quite yet," Cablevision Systems CEO Jim Dolan said Friday on the company's earnings conference call in addressing Wall Street's cord-cutting worries that have driven down entertainment stocks this week.
There is not enough programming in over-the-top services and online to "really entice a mainstream customer" yet to drop traditional bundles in a "landslide" move, he argued. "Eventually though there will be enough programming for over-the-top to be competitive with the traditional [pay TV] bundle."
Dolan suggested that it would take at least five years for 10 percent and 10 years for 30 percent of the market to move away from the bundle.
The change will not happen "over a very short period of time," because consumers are "very, very comfortable with the amount of choice cable offers." Dolan compared the cable bundle to buying "the entire magazine stand" to have options to read various publications.
But he also said that broadcasters see retransmission fees as "a pot of gold" as they continue to boost prices, which the Cablevision boss said would contribute to driving some subscribers away.
Management also said Friday that its cord-cutter packages typically attract new customers the company wouldn’t normally reach instead of cannibalizing the traditional pay TV business.
Cablevision said it would not comment on M&A in the pay TV sector.
Dolan on Friday also came out swinging against telecom giant Verizon and its FiOS video and broadband services. He argued that "the impact of FiOS on Cablevision has been minimal," saying customers going to Verizon are usually promotional shoppers in search of the lowest prices. He said that Verizon does better in competition with satellite TV firms.
Dolan also said FiOS was an unprofitable business today and added he doubted "that they will ever be profitable." He concluded that "the Verizon effect," if there ever was one, "is over."