January 24, 2020
The migration from pay-TV to over-the-top video among distributors is gaining momentum.
Gigabit Minnesota, a regional pay-TV operator near Minneapolis, is getting out of the TV distribution business. In an acknowledgment of changing market forces toward streaming video, Gigabit has begun informing its 10,000 customers that it would cease distributing linear TV on Jan. 31.
In a statement, Gigabit cited increased carriage fees from content holders for the decision to focus on high-speed Internet service and help facilitate access to third-party online TV services such as Sling TV and Philo TV, among others.
“The TV business is changing,” the company said. “This [content] cost increase makes our TV service just way too expensive so we’re going to be leaving [the business],” the company said.
The move follows a North Kansas pay-TV operator that announced it would switch toward broadband distribution and away from linear TV. Major pay-TV operators such as Comcast Cable continue to hemorrhage subscribers, including 149,000 subs in the most-recent fiscal period.
Gigabit, like Rainbow Communications in Kansas, is seeking to direct customers to online TV platforms, in addition to SVOD services such as Netflix, Amazon Prime Video and Disney-owned Hulu.
It offers myriad high-speed Internet plans, including fibre-optic, priced from $69.95 for 500 Mbps. Indeed, Comcast said it added more than 400,000 broadband subs in Q4, and 1.4 million subs in 2019.