Is Television Being Held Back by Traditional Cable Bundles?

While television continues to migrate online, live sports have been slow to follow. Many people are still tethered to their cable subscriptions because they want to watch their sports live. As soon as sports programming breaks from bundles and is streamed online, more consumers may become cord cutters and abandon their cable subscriptions altogether. Meanwhile, Canada has become one of the first countries to require companies to dismantle their cable bundles and allow customers to choose their channels.

family-TVThis Canadian regulation is a response to the changing way that people consume television. With the rise in popularity of online streaming services like Netflix, Amazon, Hulu Plus, and others, viewers turn less to traditional linear programming. According to one study, 7.6 million households have dropped their cable subscriptions in lieu of online options.

Sports, though, has been a major holdout. Existing deals between sports leagues and other companies have limited the amount of sports programming that can be watched online or even on mobile phones. Some live events that are streamed online require a cable subscription verification to watch.

However, that’s slowly starting to change. Sony’s recently launched Internet TV service also offers access to sports broadcasters like CBS, Fox, and NBC. Sling TV, an online television service from Dish Network, offers ESPN as part of its base package and nine other sports channels as part of the add-on “Sports Extra” channels.

Tony Emerson, a Microsoft director who helps media and cable companies build Internet TV services with the Azure cloud computing service, told Wired, “This was the one that could break the camel’s back. Once you can get ESPN unbundled from the cable system, it puts into question the whole bundle idea or lots of different channels.”

Canada has already moved away from the concept of cable bundles. The country’s communication regulator decided that cable companies have to start offering channels a la carte. According to Bloomberg, “By March 2016, companies will have to offer a smaller basic cable service with educational and local TV for no more than C$25 ($20).” The two largest cable providers in Canada have also already started their own streaming services.

The U.S. cable industry is also moving towards smaller bundles, but not because of regulation. Competition to hold onto cord cutters has prompted companies to offer “skinny bundles.” Even Apple plans to launch an online TV service with 25 channels this year.