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February 25, 2020
Pushing ahead on a strategy to prioritize high-margin broadband while also ceding some ground to streaming pay-TV service providers, competitive cable operator WideOpenWest (WOW) said it has teamed with a handful of OTT services for a trial in Charleston, SC.
For the test, WOW is marketing OTT-TV options from fuboTV, Philo, Sling TV and YouTube TV. This broad mix of virtual multichannel video programming distributors (vMVPDs) gives WOW broadband subs the ability to pick from a range of different service types and pricing packages. That includes skinny bundles like Sling TV, Philo's entertainment-focused service, as well as services that deliver bigger channel lineups, including select local broadcast channels, from YouTube TV and fuboTV.
Figure 1: WOW is promoting its streaming TV partners in Charleston, and offering new customers free broadband installs and a free Amazon Fire TV Stick.
WOW and the OTT-TV partners on board for the Charleston trial did not announce financial terms, including whether WOW is in line to receive a financial bounty for new OTT-TV subs it brings through the door.
WOW said the new OTT options will "help Charleston customers cut the cord." To help prime the pump, new customers will get a free in-home setup, along with a free Amazon Fire TV Stick to access one of the streaming services WOW is promoting.
The Charleston trial follows a separate agreement announced last year between WOW and Philo, a sports-free service that starts at $20 per month.
"Our robust broadband network is the natural choice for HSD customers in Charleston who want to access streaming services on their terms," WOW CEO Teresa Elder said in a statement. WOW offers uncapped residential broadband service, including a 1 Gbit/s tier across the vast majority of its footprint.
Why this matters
The trial follows a broader trend in which cable operators continue to focus on high-margin broadband service while not worrying about saving less profitable video customers who don't want a traditional big pay-TV bundle. In turn, the pilot in Charleston gives WOW's OTT-TV partners more exposure to cord-cutters that, if successful, could lead WOW to implement similar deals in its other markets, such as Auburn, Ala.; Chicago; Detroit; Cleveland, Ohio; and Knoxville, Tenn.
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WOW joins a growing list of cable ops and wireline broadband service providers that are happy to cede some of those pay-TV subs to OTT providers so long as those consumers continue to get broadband from them. Just this week, for example, Windstream announced a similar partnership with YouTube TV.
That trend is also gaining ground amid the broader erosion of the US pay-TV market. In Q4 2019 alone, traditional US pay-TV service providers lost 1.49 million video subs, while vMVPDs gained about 630,000 subs.
— Jeff Baumgartner, Senior Editor, Light Reading
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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