Even Constitution thinks that cable TV sucks now and has develop into a worse and worse deal over time

• Constitution, the second-biggest cable firm within the US, says the cable TV mannequin is damaged.
• Prospects are paying increasingly for a worse and worse product.

Simply how damaged is cable TV?

So damaged that Constitution, the second-biggest cable firm within the US with almost 15 million subscribers, says it is prepared to stroll away from the enterprise totally.

Constitution is presently locked in an unsightly dispute with Disney over what are referred to as carriage charges, or how a lot it pays to provide its subscribers entry to channels like ESPN. That is led to a blackout of Disney-owned channels that is taken the US Open, amongst different programming, off the air.

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Fights like this have been frequent throughout the historical past of cable TV. However there’s one thing a bit totally different about this one: Constitution is overtly saying the cable TV mannequin is in a loss of life spiral that is main customers to pay increasingly for a deteriorating product.

In an investor presentation final week, Constitution laid out its place in brutal simplicity, citing work from analysts at SVB MoffettNathanson.

This is Constitution’s argument in a nutshell: Firms like Disney responded to the rise of Netflix and streaming video through the use of their finest content material to launch their very own streamers (suppose Disney+). That accelerated cord-cutting by decreasing the standard of the content material on cable TV. As a result of Constitution pays firms like Disney per subscriber, fewer cable TV subscribers meant much less cash coming in for TV networks. And that meant that sports activities programmers (suppose Disney-owned ESPN) needed to preserve elevating their per-subscriber charges to afford the extraordinarily costly sports activities rights (which, as my colleague Lucia Moses identified, are anticipated to prime $30 billion by 2025).

This is a chart that Constitution put in its presentation that exhibits the downward spiral in motion, sourced from SVB MoffettNathanson:

In response to Constitution, this cycle has led to prospects paying increasingly cash for a worse and worse product.

That is a bum deal, proper? Constitution would possibly by no means really say it out loud, but it surely’s clear from the presentation that it thinks the cable TV mannequin sucks now and has develop into a nasty deal for purchasers.

This is one other slide from the presentation that exhibits the place Constitution says it is in:

So, the place will we go from right here? On this dysfunctional market, Constitution is wanting past TV, and says the “video product is now not a key driver of economic efficiency.”

Constitution mentioned its two choices are both “create a path to a brand new financial and distribution mannequin” or “largely exit the normal video enterprise.”

“We’re both shifting ahead with a brand new collaborative video mannequin or we’re shifting on,” Constitution President and CEO Chris Winfrey mentioned final week.

For now, Constitution desires to extract concessions from Disney in an effort to reach at a brand new mannequin.

In a world the place the very best TV content material is more and more on streaming providers, Constitution’s large thought is that Disney (and presumably others) ought to give its subscribers free entry to streamers like Disney+.

Disney is saying “no” — for now — however I’ve to wonder if that is simply a problem of worth. I may simply think about a brand new sort of cable TV package deal that mixes some dwell information and sports activities channels with entry to streaming providers. Why not?

I do not suppose there’s anybody within the trade who actually thinks the present mannequin is “working.” One thing has to provide.