CHICAGO - Byron Allen, founder, owner and chairman of Entertainment Studios Networks took a bold and unpopular stance at the usually staid Cable Show when he warned fellow "niche" channel programmers that the Internet will eat an unsuspecting cable industry's lunch--along with its smaller programming services--if the industry doesn't take steps to stop spiraling programming costs.
"I think the industry is going to have a very rude awakening," Allen warned during a session entitled Changing Channels: The Evolution of Targeted Networks in a Multi-Platform World. "I think the door is open, especially for over-the-top" if cable doesn't "significantly" cut programming costs.
Allen's fellow panelists dismissed, to an extent, his warnings, claiming that there was no audience dropoff but that the audience was, in fact, just watching more programming on different platforms.
"It's not like we're losing them, they're just consuming more," said Kim Martin, president-general manager of WE TV & the Wedding Channel.
Allen, though, was having none of that.
"We can all act like that's not happening. It's there," he said. "The cable industry is going to have to do a reset. If the cable industry doesn't reduce its programming costs by 80 to 100 percent, it's going to have a rude awakening."
Related articles:
Programming costs to blame for Cox basic cable hikes
Comcast's Angelakis: Programming costs continue to be 'a challenge'