The traditional cable pay-TV model is continuing to die from a thousand cuts as more operators get out of the business and focus on higher-margin broadband services.

Adding to the small but growing list of cable operators to give pay-TV the heave-ho is Mid-Rivers Communications, a coop based in Circle, Montana, that serves towns such as Glendive, Lewistown, Miles City, Fairview and Sidney.

Figure 1: (Source: Michael Zech/Alamy Stock Photo)

As spotted by Cord Cutters News, Mid-Rivers has alerted customers it will shut down its cable TV service on December 31, 2023, and continue to offer broadband and phone services. Mid-Rivers has been selling a couple of pay-TV options: a basic cable TV service for $46.95 per month and a bigger "Choice" offering that costs $151.95 per month.

"Cable TV subscriber counts are on a steep decline as customers move to streaming video. Cable TV is a courtesy we have provided only to certain customers in select areas, while customers in all parts of our service area rely heavily on us for Internet and telephone services," Mid-Rivers said in its statement to customers about the coming change. "Cable TV makes up only about 10 percent of the Cooperative's active customer connections today. Traditional cable television services are no longer a sustainable option for small communities."

Mid-Rivers has outlined a range of Internet-delivered streaming alternatives customers can use, including various virtual multichannel video programming distributors (vMVPDs) and subscription VoD services, as well as which local broadcast TV channels can be received for free with a digital antenna.

The company is also pointing its pay-TV subs to services like MyBundle and Suppose.TV that helps consumers build personalized video streaming bundles based on their budgets and programming requirements.

Part of a broader trend

Though Mid-River's decision seems like a drop in the bucket, it does speak to a broader trend among small and mid-sized cable operators that are taking on "broadband-first" footing. A recent example is WideOpenWest, a midsized operator that announced it will phase-out its own pay-TV service amid a newly forged partnership with YouTube TV, a top vMVPD.

Meanwhile, other cable operators such as Comcast and Charter Communications are deemphasizing pay-TV, focusing only on their most profitable pay-TV customers and not chasing after them with deep discounts and promotional offers. Also in that group, Cable One still offers its own pay-TV service, including a relatively new app-based streaming version, but has seen the penetration video plunge to just 6.1% at the end of the first quarter of 2023.

Altice USA, another operator that is shedding video subs, is exploring the idea of not putting in its own video infrastructure in new build areas and holding conversations about possible partnerships with third-parties

This is all coming together as traditional pay-TV is in a historic freefall. The US pay-TV industry lost 2.31 million subs, including 2.04 million among traditional providers, in Q1 2023.

"For Cable in particular, video is increasingly viewed to be lost cause," MoffettNathanson analyst Craig Moffett observed in his most recent "Cord Cutting Monitor" report. "In short, there remains no obvious floor for traditional video distribution; whatever sports and news floor there might be for cable network programming – and we're no longer confident even of that – can easily be met by vMVPDs, which despite spiraling prices are still cheaper than most cable alternatives."

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— Jeff Baumgartner, Senior Editor, Light Reading