Washington -- “Everyone seems hell-bent on making sure the bundle persists, [but] we cannot continue to raise prices. That is what will eventually break the bundle,” said Michael Morrison, director of Fioptics Service at Cincinnati Bell, which will launch its “Fioptics MyTV” skinny bundles of video service on Monday, March 7.
“We would rather go to broadband, a much higher-margin product,” he added. “We want to offer those choices.”
Speaking on a panel about “The New Age of Video Consumption” during the American Cable Association Summit in Washington, Morrison explained that the company’s biggest challenge was determining channels that viewers want to see, even if they are not the most popular channels nationwide.
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“Being able to let a customer slim down their entertainment options is very important. This is something they want. We’re taking our first step,” Morrison said.
MyTV will supplement Cincinnati Bell’s current video service, which serves 115,000 customers, overbuilding the Time Warner Cable system in the market. When queried by Multichannel News, Morrison declined to predict the take-up of the new service.
MyTV will offer viewer-selected tiers will start with a $35.99 per month Starter Package ($29.99 for the foundation subscription plus $6 for one genre bundle), which will include about 100 channels. This core package includes local channels, as well as cable channels including AMC, Discovery Channel and HGTV.
Morrison said that during consumer testing, 80% of potential subscribers liked the skinny bundle options and pricing, compared to about 25% who like current pricing and structural formats. “We have good options versus Time Warner,” Morrison said, noting that MyTV is carried on the 1 Gbps network that Cincinnati Bell has built during the past eight years.
“We hope that with the MyTV launch, it will make the entertainment more valuable,” he added. “If you look at what we’re doing, we know that we’re paying more for the packages [than bigger MSOs]. It forces us to be more creative to find new ways to package [channels].”
Morrison’s enthusiastic outlook about MyTV and skinny bundles was part of ACA’s dialogue about the migration of cable operations away from traditional video delivery.
Gene Kimmelman, CEO of Public Knowledge, on the same panel, focused on the ability of new technologies to delivery new services.
“The danger is that the traditional players are continuing to duke it out under old rules and [hence] may be left behind,” he said.
Sandy Brown, CEO of ONE World Sports Network, predicted, “As we look at where this will head, there will always be a place for the bundle.” But he acknowledged that “the OTT market is not as it will be in a year or two.”
Asked about the role of Comcast’s X1 platform and other access concepts, Morrison said that he expects future licensing deals will generate new kinds of program options.
“Whether it’s provided by X1, TiVo or the Roku box, if a customer has one platform, that’s the best experience for the customer.” He said that he expects “three to five years from now, most of our experiences will be through an app.”
And he emphasized that, “High quality content will continue, whether it’s over the top or [via] a traditional bundle.”