Zero Profit Margins for Linear Video by 2020, Small Cable Ops Say

By about 2020, smaller U.S. cable TV companies are going to experience zero profit margins on their linear video programming businesses, according to the American Cable Association.

At least in part, rapidly-growing content costs are an issue, the ACA says.

To the extent that linear video constitutes a key part of the business case for fixed network operations, that collapse of the linear video model will imperil further investments in networks, the ACA also argues.

The broader point might be the growing importance of scale as a driver of the linear video business model, and a growing potential threat to the survival of the business model as over the top alternatives, costing less, become more available.

Should that happen, the business model even for the larger service providers will be challenged.

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