Cable operators see no TV writer strike impact, yet
NEW YORK (Reuters) - Cable operators have seen no impact on customers signing up for pay-TV packages since a Hollywood screenwriters strike started earlier this month, according to company sources.
Cable officials who spoke to Reuters but did not want to be identified said that the walkout was unlikely to affect subscriptions in the near term or accelerate the rate of cancellations because most of the shows impacted by the strike are still available on free broadcast networks.
The strike, which began on November 5, comes at a sensitive time for the U.S. television industry, particularly for broadcast networks which are trying to stem an erosion of audiences to the Web and other outlets.
Cable operators like Comcast Corp and Time Warner Cable have started to see a slowdown in growth and in some cases have begun to lose basic video subscribers, with greater competition from satellite and phone companies.
"I really don't see any direct impact on cable or satellite because of the strike," said Thomas Eagan, analyst at Oppenheimer & Co. "It could be a positive if it changes consumers' viewing habits to cable networks,"
Eagan said a prolonged strike could help the audience ratings of smaller cable networks.
"As well as improving ratings of cable networks like Discovery, it could increase video-on-demand usage as well," said Eagan.
Talk shows like broadcast network NBC's "The Tonight Show with Jay Leno" and CBS Corp's "Late Show with David Letterman" were immediately impacted by the strike by The Writers' Guild of America since they rely on fresh writing to reflect current events.
At issue are writers' demands for a greater share of revenue from the Internet, widely seen as a key future distribution channel for most entertainment.
Popular premium shows, including the dramas or comedies on cable channels HBO and Showtime, are recorded well before airing and have not been affected yet, though they will be if the strike goes on much longer. Such shows help attract customers to cable and satellite pay-TV services.
Leading cable operators have been keen to push new video on-demand services to consumers after investing significant amounts to develop VOD technology and negotiating with program makers and Hollywood studios. VOD programming is available both for free and at a premium price.
Most analysts say wider economic conditions, including the downturn in the U.S. housing market and subprime mortgage crisis, will have the most impact on subscriber growth trends in the pay-TV market.
"The writers' strike is not a big lever in making a decision on signing up for cable, the big lever is the economy," says Todd Mitchell, analyst at Kaufman Bros. "There's a lot of weakness at the low-end of the consumer market."
Reuters/Nielsen
