Cable TV operators like Comcast and Charter have rarely, if ever, had to compete directly with each other. But that truce — kept in place thanks to local franchise agreements that limit competition — may soon end if the pay-TV companies decide to start offering service outside of their footprint.
Bloomberg reports that in order to stay relevant with consumers, companies like Comcast and Charter might just have to start encroaching on each other’s turf with their own streaming services.
At least that’s the belief for Discovery Communications chief executive David Zaslav, who told reporters this week that increased competition from streaming services will eventually take a toll on cable providers.
For as long as we can remember, cable providers like Comcast and Charter have stayed away from each other’s largest service areas — an issue that was constantly discussed during the merger approval process in recent years.
Zaslav contends that the companies will eventually have to disrupt the system, starting a “street fight” of sorts between traditional cable companies and streaming service providers such as AT&T (DirecTV Now), Dish (Sling), and Sony (PlayStation Vue).
These live TV streaming services are offered by companies that have never been hemmed in by franchise agreements. DirecTV and Dish compete against each other, and against traditional cable companies, for viewers nationwide. The cable providers offer ample streaming content, but currently only for their existing pay-TV customers.
“Every cable operator is probably lying and waiting, and they need to have their own over-the-top solution,” Zaslav said, as reported by Bloomberg.
Still, he cautions that providers should be careful about their next steps.
While Zaslav didn’t provide any inside knowledge on when providers might launch their own streaming services, rumors surfaced this week that Comcast is going to join the competition and launch a $15 streaming service later this year.
While that service is expected to only be available to existing Comcast customers, the cable giant has also reportedly been working “most favored nation” clauses into its contracts with broadcasters. These agreements could let Comcast offer streaming access to these channels outside of its current service footprint.