At the same time, Apple pitched media companies on a "best of TV" subscription service to television networks under which customers would pay a monthly fee for on-demand access to programs from a bundle of participating TV networks, giving consumers another way to readily access television content.
Furthermore, there is pressure from the pay-TV companies over the carriage fee agreements.
FORBES: Time Warner's Stock Is Still Undervalued On Predictable Cash Flow And Growth
It is well known that carriage fee increases have led to several disputes between pay-TV companies and media giants.
Whether or not the additional profits from these deals will be able to compensate for pay-TV industry pressure over the carriage fee is something that is unclear as of now.
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Going forward, growth in the subscription fee is likely to slow due to pressure from pay-TV service providers and expected competition from NBC and Fox, who are planning to launch nationwide sports networks to compete with ESPN.
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The financials for a big-budget TV show are more compelling if the license fee and other income sources stay in the family.
In order to protect subscribers from price rises, pay-TV companies are pressuring media companies to reduce their proposed fee increases for their channels.
FORBES: Time Warner's Stock Is Still Undervalued On Predictable Cash Flow And Growth
We believe that the margins are already at very high levels and there will be pressure from pay-TV service providers to stall the growth in the carriage fee for cable channels.
FORBES: Disney's Multi-Platform Distribution Deals Can Lift Margins And Outlook
The annual increase in fee per subscriber is predetermined as a part of multi-year contracts between pay-TV companies and media houses.
FORBES: Time Warner's Stock Is Still Undervalued On Predictable Cash Flow And Growth
Our average fee per subscriber forecast is a mix of revenues that Dish Network generates from pay-TV as well as its small broadband business.
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