CHICAGO (Reuters) – For all the talk about competitive threats from the likes of Netflix Inc or Apple Inc, it is rising poverty among households that TV executives say is their biggest source of concern.
Executives from News Corp, Comcast Corp and Time Warner Inc, speaking at the annual Cable Show industry event, made clear the industry needed a stronger housing market and better jobs picture to win new customers and keep existing ones.
"We have to be sensitive in making sure we have a product that consumers can afford," said Pat Esser, president of privately held Cox Communications, speaking at the industry's biggest yearly event.
Investors and analysts, with a few exceptions, can often be heard worrying more about how the cable industry will cope with cheaper entertainment packages from rivals such as Netflix, Amazon.com Inc or Google Inc.
Time Warner Cable Chief Executive Glenn Britt, however, was one of the executives focusing on the hazards of a bad economy.
"There clearly is a growing underclass of people who clearly can't afford it," he said. "It would serve us well to worry about that group."
Even with the economy on shaky footing, Viacom CEO Phillipe Dauman and Time Warner CEO Jeff Bewkes remained particularly bullish about cable's prospects.
Dauman said it was "remarkable" that cable was one of the last things that customers cut off during the recession and was a testament to the value that cable offered. (or is it a testament to America's addiction to television?)
Bernstein Research analyst Craig Moffett, one of the analysts who has written extensively about the poverty issue, said the cable business was a "rigged game" that allowed programing fee hikes to be passed on by operators to consumers with impunity.
"That has been a wonderfully attractive model for a generation, but the danger, of course, is that eventually the video product will be priced into irrelevance for lower income consumers," said Moffett. "I don't know when it will happen, but I suspect we're already perilously close."
So someone in corporate America finally sees the peril of increasing poverty in America because it hurts their bottom line. Assholes!