Major TV Networks going Direct to Consumer

Last week, a few major TV networks including HBO, ESPN, and CBS, announced that they would offer some digital content through proprietary digital platforms. This means that the networks are more and more testing the waters of bypassing industry convention and avoiding cable providers like Comcast or TimeWarner as well as eschewing digital powerhouses such as Hulu and Netflix.

The Winners:

• Customers: This move benefits viewers immensely as it provides them access to more content without having to subscribe to costly and bloated cable packages or even paying for a bundled content platform like Netflix if all he or she cares about is one piece of content. 
• TV Networks: Networks are still getting the best of both worlds - they can still rely on 3rd party distribution for mass consumption while they test new delivery methods without cannibalizing their bread and butter revenue. If the direct to consumer channel is successful, Networks can expect a larger share of the revenue pie given that they don't need to go through a distributor. 

The Losers:

• Cable Companies: While cable bill rates have skyrocketed in the past 5 years, cable companies will soon have to augment their offerings to stem the bleeding of many viewers, especially the ever illusive Millenial demographic, choosing to cut the cord on traditional TV. Comcast, for example, has created new, personalized packages that offer fewer, premium stations and internet at a lower cost 

The below infographic outlines the preferred channel for content consumption by age demographic. Given that the majority of cord nevers are currently the youngest demographic, cable companies will need to create new value to retain the eyeballs and therefore advertising dollars they rely on for their lifeblood.