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Would consumers pay to stream live, local TV channels to a Roku or other connected set-top box? And if so, how much would they shell out for such a service? That’s a question that’s on the mind of Sonic.net CEO Dane Jasper, who’s doing a bit of informal market research on the topic.
On Thursday night, Jasper tweeted out a link to a poll, asking if consumers would sign up for a local live-streaming service. The service would include live streams of TV shows from local broadcasters, including ABC,(s DIS) NBC,(s CMCSA) Fox (s NWS) and CBS,(s CBS) as well as PBS programming — but it would not have a DVR or on-demand component. Presumably that would come from other services available on the Roku box, such as Netflix (s NFLX) or Hulu Plus.
This isn’t the first time Jasper has posed this question on social networks. A little more than a month ago he polled followers on Google+, asking the same question. But unlike the GoPollGo results, which are public, that poll was powered by Google Docs, and the results aren’t shared.
That said, it’s easy to see why Jasper might be interested in rolling out a subscription-video offering. For Sonic, adding a low-cost video component could be one way to differentiate its services and make them stickier. Unlike larger competitors like Comcast (s CMCSA) or AT&T,(s T) Sonic is a pure-play ISP, meaning that it doesn’t provide pay-TV services, just broadband. So adding a pay-TV component, even if that only means local channels, could provide a great deal of value for a relatively low cost.
How much would the plan cost?
But of course, the devil is in the details. Pricing seems to be the key sticking point here, and it’s not clear whether or not Sonic would even be able to roll out a low-cost alternative to broadcast cable packages at a sub-$10 price point. On DirecTV’s earnings call on Thursday, CEO Mike White told investors that it would be difficult for any provider to create a streaming package that would make sense at a reasonable price point.
“If you look at kind of cost of programming . . . its kind of hard to get to a meaningful group of channels for any price that’s I would say less than even $30,” White said on the call.
Didn’t users cut the cord for a reason?
Then there’s the question of whether or not Sonic’s broadband-only subscriber base would even want live TV. After all, at some point we must assume that they specifically chose not to pay one of its competitors for TV services. It’s possible that a $5 service might be more attractive than most available cable offerings, but traditionally low-cost cable packages rarely attract much customer interest.
And finally, there’s the reality that most of this content is already available to viewers either through over-the-air signals, which they can pick up for free with an HD antenna, or on-demand from Hulu and other network sites. There’s a good chance that users who have chosen to go broadband-only already are either getting their programming in one of those ways, or TV simply isn’t that important to them.
The results of Jasper’s most recent survey seem to agree: While admittedly taken from a small sample, half of all respondents said they would see no value in such a service, with about 40 percent saying they would pay just $5 and 7 percent saying they would pay $10. All of which suggests that even if there is a market for a low-cost, broadcast-only streaming option, the number of potential subscribers is likely very small. And they’re unlikely to pay very much.