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Cable Companies

Media Giants Push ‘Skinny’ Subscription Services to Stem the Bleeding

Barb Darrow
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Barb Darrow
Barb Darrow
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Barb Darrow
By
Barb Darrow
Barb Darrow
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May 15, 2017, 8:56 AM ET

Americans are getting rid of full cable subscriptions at a fast clip. For the first quarter of the year, a record 782,000 customers pulled the plug on cable subscriptions, according to research firm MoffettNathanson.

Many consumers retain cable for broadband Internet access and then turn to Netflix (NFLX), Hulu, Amazon (AMZN) Prime, or YouTube (GOOGL) to stream entertainment.

So, as U.S. consumers continue to cut the cord on pricey cable TV packages, media companies are coming up with less expensive subscription bundles to stem the bleeding. But not every channel will make it into these new “skinny bundles.”

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As the Wall Street Journal reports, broadcast networks and cable channels affiliated with Disney, 21st Century Fox, and NBCUniversal are often included in new bundles from the likes of Comcast and Time Warner.

But channels aligned with Viacom, Discovery, and A+E Networks are having less success in what is starting to seem like a high-stakes game of musical chairs. After all, a skinny bundle isn’t a skinny bundle if it’s packed with so many options, each of which adds cost.

So media companies have to get creative. CBS (CBS), for example, last year launched its CBS All Access streaming service, headlined by The Good Fight, a spinoff sequel capitalizing on its longtime award-winning drama The Good Wife.

Related: You Can Now Go Ad-Free on CBS All Access

Customers who balk at spending more than $140 for a full cable TV package may still cough up $15 to $40 a month for Comcast’s (CMCSA) proposed Xfinity Instant TV package, for example. This will include the broadcast networks with Spanish-language Telemundo channel and ESPN.

Related: Cord-cutting Reaches One in Five U.S. Households

The inclusion of ESPN is somewhat shocking because, until recently, ESPN and other sports channels were among the few properties many consumers would pay extra for. ESPN, which laid off some 100 staffers last month, is clearly not the cash cow for parent company Disney that it once was.

Last week on Disney’s (DIS) second quarter earnings call, CEO Bob Iger put the best face on the situation, telling CNBC that live sports remain a “huge driver of consumption.”

Disney, which also owns ABC, is seeing “significant” subscription growth for its own streaming services, according to Iger, although it’s not yet enough to make up for declines in its traditional TV platforms.

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Barb Darrow
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