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LONDON — Top U.S. cable executives on Tuesday discussed rising programming costs, network carriage disputes and video subscriber trends here at an investor conference.
“I don’t think this is sustainable in the long run,” Time Warner Cable CEO Glenn Britt said at the Bank of America Merrill Lynch 2013 Global Telecom & Media Conference about rising carriage costs. “We can’t have consumer prices and underlying prices going up at multiple the rate of inflation.”
While content companies “crow about what they can charge,” Britt said “they all know it is not sustainable.” He has been one of the most vocal pay TV CEOs on the issue of rising network costs and retransmission consent fees.
While he said there are no strong signs of the much-debated cord-cutting by cable subscribers to watch TV shows on broadband options they prefer, he said: “The bigger threat is people who can’t afford the TV package.”
Britt also once again suggested that cable operators may look to get regulators to step in if needed. “We will see if the new FCC head will address it,” he said about the issue of rising programming costs and carriage disputes. “The old one didn’t.” President Obama last month nominated Tom Wheeler as the next FCC chairman.
Asked about pay TV subscriber momentum in the U.S. amid continuing declines for the cable industry, Britt said “growth depends on household formation, which has been pretty weak.” While “there are signs that it is getting a little better,” there has been no major change, he emphasized.
But he said that the broadband subscription business “still has a lot of growth ahead of it.”
Meanwhile, Cablevision Systems CFO and vice chairman Gregg Seibert said the 5,000 video subscriber loss that his company recorded for the first quarter was a good showing given heated competition, a January price increase and continued fallout from Hurricane Sandy. Customer-service call centers saw little pushback on the rate increases, he said.
He also criticized content companies of continuing to “relentlessly increase costs for the distributors,” meaning that “consumers are being forced to pay higher and higher prices.”
Sports costs in particular have become very high, but Seibert also pointed to initiatives in Washington, led by such high-profile politicians as John McCain, that are looking to tackle the issue and possibly lead to a la carte, or unbundled, network offerings.
Cable executives on Tuesday also signaled no immediate plans to launch usage-based broadband pricing plans.
“I don’t see usage-based pricing as something we have plans for at this time,” Seibert said.
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