People being priced out

Under state regulations, carri-

ers must relay changes in pricing to PURA, but those rates are not subject to the agency’s approval, as is the case with electric, gas and water rates, on grounds sufficient competition exists between cable, satellite and Internet-based services.

If cable TV rates are competitive with satellite TV and Frontier Communications, which provides

service in most of Connecticut, traditional pay TV costs more than what customers would pay to “cut the cord” and subscribe to a streaming video service to a smart TV, with several studies in the past year differing on the total savings.

But for many, it is a daunting step to jettison their familiar TV platform and experiment with alternatives such as DirectTV Now, Hulu or Sling TV that offer narrower channel sets and limited

access to sought-for programs such as live sports.

Still, more are doing so — according to the New Hampshire-based market research firm Leichtman Research Group, Sling TV and DirectTV Now added 536,000 subscribers in the third quarter of 2017 for a 22 percent increase. By comparison, major cable, TV and satellite carriers including Altice USA, Charter Communications, Comcast and Frontier suffered the loss of 943,000 subscribers for a one percent decline over the three-month period.

“There are (a) lot of pressures in the video business with the pricing and packaging,” said Tom Rutledge, CEO of Stamford-based Charter, during an early February conference call in which he referenced the emergence of non-traditional TV content streamers. “There are a lot

of people being priced out of the market.”

On the same call, Charter’s chief financial officer told analysts the company is avoiding general rate hikes this year in favor of achieving revenue growth by adding new subscribers.

From cord cutters to ‘cord nevers’

Switching cable TV providers is not as easy as changing channels, however, with carriers often levying fees for customers exiting contracts early; and new installation charges awaiting those who want to change carriers. In the case of Altice USA, new Connecticut customers will pay less on that front after the carrier cut this month its standard installation charge to $69, a $10 discount from before.

Altice USA closed out January by unveiling its

new Altice One platform, which ditches the set-top TV boxes, modems and wireless routers with a single device handling all three functions; prices start at $70 per month for new customers in the Norwalk area including 100 megabits-per-second broadband. Among other features, the system allows subscribers to navigate functions through voice commands, and notably includes interfaces to NetFlix, YouTube and other streaming services.

It is the newest addition to the content and feature bundling concept pay TV companies have relied on to generate revenue. But it further exposes its own customers to streaming services they could get with a broadband connection only, saving themselves the cost of the rest of Altice USA’s Optimum channel lineup.

As AT&T CEO Randall Stephenson pointed out at the end of January, regardless of whether existing pay TV subscribers elect to become “cord cutters” in reaction to their monthly cable bill, a new generation of “cord nevers” are entering the workforce who have never paid for a cable bill — and never will, having grown up quite happy with choosing what they want to watch on mobile devices and smart TVs.

“Since the day we bought DirecTV, we assume that traditional linear video would be in a declining mode,” Stephenson said. “(Streaming) and the ability to consume video on mobile devices, we believe, would be the trend and ... where things went.”